Agenda For Next PM

Lets Change India
I
ndia is passing through an incredibly challenging period in its economic advance. If vital
indicators are any sign of the health of the economy, India is ailing. Even the intellectual
moorings of our economic crisis have been dislocated. Advocates of enlightened economic
growth are painted as heartless elitists, baying for more wealth disparities. On the other
hand, those who push for unsustainable doles are dressed up in saintliness. But that is
no reason to surrender to cynicism. We strongly believe that despite the tough global economic
conditions, India can prosper if the right policy frameworks are put in to place quickly. We also
believe that the growth versus inclusion debate is entirely concocted. Once we have growth, we
must have inclusion and redistribution. The 2014 General Election is a pivotal moment in history.
A dynamic new administration has an opportunity to revive the India story.
The realm of ideas is no monopoly of the Government. The country has a critical mass of experts;
from academia, from think tanks and from the real world of practitioners; who can together be
a formidable knowledge base. It is with this background that Think India embarked on its frst
project Change India: An Agenda for the Next Prime Minister for which we invited the fnest
minds from across the country to draw up an action plan for the person who will take over the
reins of Government in May 2014. Often such ideas are expressed in theory and academic pos-
tulates but we have taken care to extract Action Points, so that the Next Prime Minister can hit
the ground running. We have eschewed the temptation to use complex prose instead, the Stra-
tegic Policy Agenda will be presented in easy to understand bullets, supported by case studies
and illustrations, that can, given political focus and will, be implemented.
The inspiration for Change India is drawn from Heritage Foundations Mandate for Leadership.
Over three decades ago, in the run up to the US Presidential Election of 1980, the Heritage Foun-
dation, one of Americas top conservative think tanks, drew up a comprehensive policy agenda
for the next President. Though the agenda was based on centre-right economics, Heritage
reached out to the presidential campaigns of both Ronald Reagan and Jimmy Carter. Only the
Reagan campaign responded. When Ronald Reagan was inaugurated as President of the United
States in January 1981 one of his frst acts was to distribute copies of the Mandate for Leadership
to members of his Cabinet. It was to become the blueprint for reform in America, an architecture
which redefned and enriched Americas fortunes in the coming decades.
Like the Mandate for Leadership, Change India leans on the side of free market economics and
small government. Its potential throttled by the visible hand of the Government, India needs a
dose of radical reform. Our 140 point action programme that straddles 14 policy domains, with
contributions from over 50 expert minds, is not written for any political party. We would only be
delighted to share it with any interested political party, whatever its colour in Indias rainbow
political spectrum.
India needs to move beyond the bitter partisanship of party politics to evolve an agenda that
would serve the best interests of its 1.2 billion people. Our Agenda for Next Prime Minister is a
small contribution to this exercise. In the hands of an able Government, it could be a really big
idea, a potent weapon, something which could Change India.
Dhiraj Nayyar
CEO, Think India Foundation
Raghav Bahl
Founder, Think India Foundation,
& Founder and Editor, Network 18
List of Experts
ADMINISTRATIVE REFORM &
CORRUPTION
Kiran Bedi was Indias frst woman offcer to join the Indian Police Service.
She has worked with the United Nations as the Police Advisor to the Secretary
General, in the Department of Peace Keeping Operations. She has represented
India in International forums on crime prevention, drug abuse, police and
prison reforms and womens issues. Kiran Bedi is a recipient of the prestigious
Ramon Magsaysay award. She is also the founder of two NGOs, Navjyoti and
India Vision Foundation.
Kiran Bedi
Rajesh Tandon is the founder President for Participatory Research in Asia
(PRIA), a voluntary organization that provides support to grassroots initiatives
in South Asia. Rajeshs research and advocacy initiatives straddle the issues
of safe workplace, right to know, citizen leadership, accountable local self-
governance, global solidarity and responsive civil society in India, South Asia
and beyond.
Rajesh Tandon
ADMINISTRATIVE REFORM
K T S Tulsi is a leading Supreme Court lawyer, a veteran Public Prosecutor
and a former Additional Solicitor General of India. Tulsi enrolled as a lawyer
in Punjab after taking a law degree in 1971 but he decided to focus on the
criminal side in the 80s. He has widely represented government, a host of
eminent individuals and organizations before various Courts of Law in India
and abroad. Tulsi has also written extensively on criminal law, patent law and
human rights law.
K T S Tulsi
MR Madhavan co-founded PRS Legislative Research and is currently its
President. Madhavan was earlier based in Singapore covering currency and
interest rate markets as Principal and Senior Strategist for Bank of America.
He has also worked with ICICI Securities in the equity research group and later
headed interest rates research. He is a Fellow (doctorate) from IIM Calcutta,
MBA from IIM Calcutta and holds a B. Tech degree from IIT Madras
MR Madhavan
TSR Subramanian is a founder member and present Chancellor of the Shiv
Nadar University. Subramanian made remarkable attempts at administrative
reforms during his tenure as Cabinet Secretary that includes the frst draft of
the Right to Information Act, steps for bringing in transparency in Government
activities etc. He has held several key positions in the Ministry of Commerce
and Agriculture and in the Government of Uttar Pradesh. Subramanian holds a
Masters degree in Public Administration from Harvard University.
TSR Subramanian
HEALTH
Ajay Jakhar is the Chairman of Bharat Krishak Samaj (Indian Farmers Forum),
a non-partisan farmers advocacy group. Ajay is also a citrus and cotton
farmer from Punjab who is passionate about farmer prosperity and choices. He
vociferously advocates the use of technology in combination with traditional
practices to maximise agricultural output.
Ajay Vir Jakhar
AGRICULTURE
Vivian Fernandes is a journalist with 28 years of practice, 18 of them in
television - and TV18 Broadcast. For many years he was editor, economic
policy with CNBC-TV18. His last assignment was as Executive Editor of
Network 18 founder, Raghav Bahls book on India and China. Vivian takes a
keen interest in agricultural policy and governance issues.
Vivian Fernandes
AGRICULTURE
Yoginder Alagh is a noted economist and the Chancellor of the Central
University of Gujarat. A former Union Cabinet Minister, he also served as
the Chairman of Institute of Rural Management Anand. Earlier, Alagh taught
Economics at University of Rajasthan, Indian Institute of Management Calcutta
and University of Pennsylvania. He also served as the member of the Planning
Commission and Vice-Chancellor of Jawaharlal Nehru University, New Delhi.
Yoginder Alagh
AGRICULTURE
Nitin Puri is President Food & Agriculture Strategy at Yes Bank. Nitin also
served as Vice President of Product Knowledge Management at Multi
Commodity Exchange of India Limited. He has extensive experience in the
Agribusiness industry, across the value chain in the areas of Commodity
Trading, Supply Chain & Food Retail, with Companies like ITC Ltd., Reliance
Retail & Aditya Birla Nuvo Ltd.
Nitin Puri
AGRICULTURE
Mahesh N Buch, is Chairman of National Centre for Human Settlements and
Environment, a nodal institution of consumer protection in Madhya Pradesh.
A former bureaucrat, Buch was awarded Padma Bhushan Award 2011, in
recognition of his distinguished service of high order in the feld of Civil
Services. He has also won the UNEP award for implementation of desertifcation
control programme in 1994-95. His main areas of concern are town and country
planning, housing, afforestation and environmental protection.
Mahesh N. Buch
CORRUPTION
Parth Shah is founder President of the Centre for Civil Society. Parths
research and advocacy work focus on issues of economic freedom, choice
and competition in education, environment and good governance. He has
published extensively in international and Indian journals. His edited books
include Morality of Markets, Friedman on India, Profles in Courage: Dissent
on Indian Socialism. He holds a PhD in Economics from Auburn University,
and taught at the University of Michigan.
Parth Shah
Atanu Dey is an economist who focuses on Indias path to prosperity from
under-development. In his book Transforming India and on his blogs, he
explores how India can achieve its potential. Atanu attended IIT Kanpur,
Rutgers University and received his Ph.D in Economics from University of
California at Berkeley. As a Reuters Fellow at Stanford University, he authored
a model for catalyzing rural economic development called RISC. Atanu lives in
San Francisco Bay area and works with Niti Digital in Mumbai.
Atanu Dey
EDUCATION
Chief Operating Offcer of a prominent think tank- Centre of Civil Society,
Harsh Srivastava was previously Chief Executive Offcer of the World
Development Forum. Before that Harsh worked for the Planning Commission
as its Consultant (Planning). He has held senior posts in Reliance Capital,
Feedback Infrastructure, and the Confederation of Indian Industry. Harsh has
also been a journalist and co-written Indias frst book on Corporate Social
Responsibility.
Harsh Srivastava
EDUCATION
Ashish Dhawan is the Founder and CEO of Central Square Foundation (CSF).
He worked for twenty years in the investment management business and ran
one of Indias leading private equity funds, ChrysCapital. In June 2012, he
left his full time role at ChrysCapital to start CSF. Ashish is an MBA with
distinction from Harvard University and a dual bachelors (BS/BA) holder with
Magna Cum Laude honours from Yale University.
Ashish Dhawan
EDUCATION
S Gopalakrishnan, popularly known as Kris Gopalakrishnan, is the Executive
Vice Chairman of Infosys. Kris, along with N.R. Narayana Murthy and fve
others, founded Infosys in 1981. Recognized as a global business and technology
thought leader, Kris was awarded the Padma Bhushan in 2011. He was also
selected as one of the winners of the 2nd Asian Corporate Director Recognition
Awards by Corporate Governance Asia in 2011. Kris was appointed as a
member of the reconstituted United Nations Global Compact Board in 2012.
S. Gopalakrishnan
EDUCATION
Madhav Chavan is a co-founder and CEO-President of Pratham, an organization
that has been recognized by the Kravis Prize and the Skoll Award, for its
contribution as a social entrepreneurial organization in education. Chavan was
awarded the WISE Prize for Education instituted by the Qatar Foundation at
the World Innovation Summit for Education. He holds a Ph. D. in Chemistry
from the Ohio State University and completed his post-doctoral work at the
University of Houston.
Madhav Chavan
EDUCATION
Manish Sabharwal is co-founder and Chairman of TeamLease Services, which
has placed more than half a million people in temporary and permanent jobs,
since its inception in 2002. Sabharwal had earlier headed India Life, a business
process outsourcing frm in the feld of human resources. Sabharwal has a
management degree from Wharton.
Manish Sabharwal
EDUCATION
EDUCATION &
HEALTH
Dr. Arunabha Ghosh is CEO of the Council on Energy, Environment and
Water (CEEW), an independent, policy research institution. With experience in
more than thirty countries, Arunabhas work intersects international relations,
global governance and human development, including climate, energy, water,
trade and confict. He advises governments, industry and civil society on
energy and resources security; renewable energy policy; water governance and
institutions; climate governance (fnancing, R&D, geoengineering); energy-
trade-climate linkages; and international regime design.
Arunabha Ghosh
ENERGY
Gurcharan Das is a well-known author, commentator and former CEO of
Procter & Gamble India. He writes regular column for the Times of India
and other Indian language papers and occasional pieces for the Wall Street
Journal, Financial Times, and Time magazine. He is the author of India Grows
at Night and The Diffculty of Being Good among other publications. Das
is a member of international advisory boards of Wal-Mat and 500 fortune
companies.
Gurcharan Das
CORRUPTION
Dipankar Gupta is a distinguished Professor and the Director of Centre of
Political Affairs and Critical Theory, at the Shiv Nadar University. A former
Jawaharlal Nehru University Professor, Dipankar has published nearly 70
research papers and won several awards for his academic contributions. He
was the editor of the prestigious journal Contributions to Indian Sociology.
Prof Gupta serves as a member of several boards like RBI, NABARD, National
Standards Broadcasting Authority, Punjab Governance Reforms Commission
and the Doon School. He was also a member of National Security Advisory
Board from 2008-2010.
Dipankar Gupta
CORRUPTION
Shakti Sinha, a former IAS offcer served as the Finance Secretary in Delhi
Government. Mr. Sinha has been a Visiting Senior Fellow on Economic
Development, with the Government of Bihar, India. From January 2000 to June
2004, he served as a Senior Advisor to the Executive Director on the Board of
the World Bank. From March 1998 to November 1999, he also served as the
Private Secretary to the Prime Minister of India.
Shakti Sinha
ENERGY
Percy S.Mistry is Chairman and CEO of Oxford International Associates Ltd.
a UK registered private unlisted company that specialises in advisory services
to governments and transnational companies. He is also a Director of the JP
Morgan Emerging Markets Investment Trust. He was a Director and Senior
Financial Advisor at the World Bank, an institution he was associated with
between 1971 and 1986. In 2008, he was Chairman of a High Level Government
Committee on making Mumbai an international fnancial centre.
Pecry S Mistry
FINANCIAL MARKETS &
TAXATION
Ajay Shah studied at IIT, Bombay and USC, Los Angeles. He has held positions
at the Centre for Monitoring Indian Economy (Mumbai), Indira Gandhi
Institute for Development Research (Bombay) and the Ministry of Finance,
and now works at NIPFP. His research interests include policy issues on Indian
economic growth, open economy macroeconomics, public fnance, fnancial
economics and pensions.
Ajay Shah
FINANCIAL MARKETS
Rama V Baru is Professor at the Centre of Social Medicine and Community
Health at the Jawaharlal Nehru University, New Delhi. Her major areas of
research interest include commercialization of health services, infectious
diseases, comparative health systems and health inequalities. She is the
author of two books- Private Health Care in India: Social Characteristics
and Trends and School Health Services in India: The Social and Economic
Contexts. She also has publications in journals and edited volumes.
Rama V Baru
HEALTH
Dr. Ashwini Kumar Setia is a senior gastroenterology consultant with Max
Healthcare. He has keen interest in issues related to public health.
Ashwini Kumar Setia
HEALTH
Dr Kirit Parikh is former Member of Planning Commission and Chairman,
Integrated Research and Action for Development. He has also served as the
Director of Indira Gandhi Institute of Development Research (IGIDR). He
was the Chairman of the Integrated Energy Policy Committee, Planning
Commission. He was a Member of the Economic Advisory Council (EAC) of
the Prime Ministers of India. In the past he had also been a member of the
National Committee for Environmental Planning & Co-ordination, the National
Committee on Science and Technology and the Fuel Policy Committee.
Kirit Parikh
ENERGY
Dr. RK Pachauri is an internationally recognized on environmental and energy
issues and their policy dimensions. He is an economist and industrial engineer
by training and has held numerous academic posts in addition to his work with
TERI and IPCC. He has co-authored above 130 papers and 27 books, most of
them about energy and environment.
R K Pachauri
ENERGY
Shankkar Aiyar is the author of Accidental India: A History of the Nations
Passage through Crisis and Change. A noted journalist-analyst, Shankkar
specializes in the interface of politics and economics. He has reported and
written extensively on the political economy of India. He majored in economics
from Bombay University and has been a Wolfson Chevening Fellow at the
Cambridge University.
Shankkar Aiyar
ENERGY &
INVESTMENT
Anjali Nayyar is currently the Senior Vice President of Global Health
Strategies. Bringing sixteen years of international health experience to GHS,
Anjali Nayyar oversees the frms work in India and other emerging markets.
Anjali most recently worked with the International AIDS Vaccine Initiative
(IAVI) for six years, where she served initially as India Country Director for
three years and then as Vice President for Country and Regional Programs,
working both in New Delhi and in New York at the organizations headquarters.
As Vice President, she led feld operations and non-research and development
programs in India, Brazil, South Africa, China, Kenya, Rwanda and Uganda. In
addition, she led the strategic development and management of IAVIs Vaccine
Preparedness Unit.
Anjali Nayyar
HEALTH
Rashesh Shah, Chairman and CEO of the Edelweiss Group has over 20 years
of experience in fnancial services in India. Prior to founding Edelweiss, he
worked with ICICI, then Indias premier industrial development bank and today
its largest private sector bank. Rashesh has served on the Boards of various
companies and Public Institutions. He has in the past served on the Executive
Committee of the National Stock Exchange.
Rashesh Shah
FINANCIAL MARKETS
Business leader, organisation builder, adviser and mentor, Sanjeev Agas career
has traversed 40 years, and sectors from consumer and services, entertainment
and light engineering, to telecommunications. Sanjeev Aga has, under his belt,
20 years as CEO and Managing Director, of Blow Plast / VIP Industries, of
Aditya Birla Nuvo, and of Idea Cellular.
Sanjiv Aga
INFRASTRUCTURE
Shailesh Pathak, a former IAS offcer, has been the President of Corporate
Strategy at SREI Infrastructure Finance Limited since December 15, 2010. He
was previously employed at Europa Capital and served as Managing Director
at Principle Europa Indian Infrastructure Fund. Mr. Pathak served as a Senior
Director of Investments at ICICI Venture. Previously, he was the Head-PPP at
IDFC.
Shailesh Pathak
INFRASTRUCTURE
Lalit Mansingh has served as Indias Foreign Secretary, Ambassador to the
United States and High Commissioner to the United Kingdom. Mansingh is the
Chairman of FICCI-India US Policy Group and President of the World Cultural
Forum (India). He has held several key positions including Prof Emeritus at
the Foreign Service Institute of India, Executive Committee Member for the
Institute of Peace and Confict Studies. Ambassador Mansingh has previously
taught at the Utkal University in Orissa.
Lalit Mansingh
FOREIGN POLICY
Commodore (retd) C Uday Bhaskar, former Director IDSA, New Delhi retired
from the Indian Navy in early 2007 after 37 years service. He was the Director
of the National Maritime Foundation form Jul 2009 till Jul 2011. He has edited
books on nuclear and international security related issues and has contributed
over 60 research articles to journals in India and abroad. Cmde Bhaskar is also
a columnist for Reuters and the Dainik Jagran.
C. Uday Bhaskar
FOREIGN POLICY
PP Shukla joined the Indian Foreign Service in 1974 and has served in Moscow,
Brussels, London and Kathmandu, among other places. He was the Diplomatic
Adviser to the Prime Minister from 1996 to 2000. Currently, he is the joint
director of the Vivekanand International Foundation, a New Delhi-based think
tank set up with the collaborative efforts of Indias leading security experts,
diplomats, industrialists and philanthropists.
Prabhat Prakash Shukla
FOREIGN POLICY
Vivek Katju was an Indian Foreign Service offcer of the 1975 batch. He
served as Indias ambassador to Afghanistan, Myanmar and Thailand. He
last assignment in Government was in the crucial position of Secretary (West)
in the Ministry of External Affairs. Ambassador Katju was one of Indias
chief negotiators during the Kandahar hijack when he headed the Pakistan-
Afghanistan_iran desk at the Ministry of External Affairs.
Vivek Katju
FOREIGN POLICY
Dr. Rajiv Lall is the Executive Chairman of IDFC. He has about three decades
of experience with leading global investment banks, multilateral agencies and in
academia. His areas of expertise include project fnance, private equity/ venture
capital, international capital markets, trade, infrastructure and macroeconomic
policy issues with a focus on emerging markets including India and China in
particular.
Rajiv Lall
INFRASTRUCTURE
Srivatsa Krishna, topped the National Civil Services Examination in 1994, was
awarded President of Indias Gold Medal and joined the Indian Administrative
Service. He was part of the leadership team which pioneered E-governance in
India and created one of Asias largest IT and investment clusters, Cyberabad,
which has been globally acclaimed by Goldman Sachs, Businessweek, The
Economist, and TIME as a marvel of Modern India. World Economic Forum
at Davos also honoured him as one of its Top 100 Young Global Leaders for
Tomorrow in Davos in 2003.
Srivatsa Krishna
INFRASTRUCTURE
Vinayak Chatterjee co-founded Feedback Infra in 1990 and continues to serve
as its Chairman. He is a strategic advisor to leading Indian companies, the
Government of India, the Ministry of Finance, State Governments, as well
as multilateral and bilateral institutions in the areas of infrastructure planning
and implementation. He is one of the leading proponents of the Public-Private
Partnership (PPP) model for developing Indias infrastructure. He is the
Chairman of the Confederation of Indian Industrys (CII) National Task Force
on Infrastructure Projects Monitoring & Advocacy.
Vinayak Chatterjee
INFRASTRUCTURE
Bibek Debroy is Professor at the Centre for Policy Research in New Delhi.
A well-known economist, he has served as the Consultant to the Department
of Economic Affairs, Ministry of Finance, Government of India. Bibek has
authored several books, papers and popular articles. He is also the Consulting
Editor of some of the most prominent fnancial newspapers.
Bibek Debroy
INVESTMENT &
MANUFACTURING
Manish Chokhani served as the Managing Director and Chief Executive Offcer
of Axis Capital Limited until November 2013. Prior to this, Mr. Chokhani was
the Managing Director and Chief Executive Offcer at Enam Securities. He
also served as a Director of Axis Capital Limited and Enam Securities Pvt. Ltd.
Manish Chokhani
INVESTMENT
Saugata Bhattacharya is senior Vice-President, Business and Chief Economist
of Axis Bank. He was a member the Finance Ministry Sub-Group on Estimating
Foreign Savings for the approach paper for 12th fve year plan. He was
previously with Unilever in India and the Infrastructure Development Finance
Company (IDFC). He was educated at Delhi School of Economics and Oxford
University.
Saugata Bhattacharya
INVESTMENT
Kiran Mazumdar Shaw is the Chairman and Managing Director of
Biocon, a biotech company and Asias largest insulin maker. She is a frst
generation entrepreneur with more than 36 years experience in biotechnology
and industrial enzymes. She was awarded the Padma Bhushan, Indias third
highest civilian award for her pioneering efforts in biotechnology. Shaw
originally trained to become a brewer in Australia.
Kiran Mazumdar Shaw
MANUFACTURING
Rajesh Chakrabarti is Clinical Associate Professor of Public Policy and
Executive Director, Bharti Institute of Public Policy, at the Mohali Campus
of Indian School of Business. Rajesh is a fellow of the Wharton Financial
Institutions Center and also a member of the Academic Panel of the International
Centre for Financial Regulation, London. He is a regular columnist for the
Financial Express. Rajesh has authored three books including Grit, Guts and
Gumption and published several articles in top Finance, Economics and
Management journals.
Rajesh Chakrabarti
MANUFACTURING
Rajiv Kumar is an economist and Senior Fellow at the Centre for Policy
Research. Earlier, he was the Secretary General of the Federation of Indian
Chambers of Commerce and Industry. Rajiv was also Director and Chief
Executive of the Indian Council for Research on International Economic
Relations (ICRIER), one of Indias top economic policy think tanks. He has
served as a member of the National Security Advisory Board for 2006-2008.
Rajiv Kumar
MANUFACTURING
RC Bhargava is Chairman of Maruti Suzuki India Ltd. Bhargava Joined Maruti
in 1981, almost immediately after its incorporation, as its Marketing Director.
A former IAS offcer, Bhargava has also served as the President and CEO of
RCB Consulting Private Limited, a premier management and human resource
consultancy frm. Before joining Maruti, Bhargava was Director (Commercial)
of Bharat Heavy Electricals Limited in 1979-80.
RC Bhargava
MANUFACTURING
Anuradha Dutt is an eminent lawyer and is presently engaged in legal practice
in the High Court and Supreme Court with over 26 years of experience in the
area of Corporate Laws. She has represented Vodafone case since 2008.
Anuradha Dutt
TAXATION
An Indian Revenue Service offcer, Mr. BM Singh served as the chairman of
Central Board for Direct Taxes in 2007.
BM Singh
TAXATION
Ketan Dalal joined PricewaterhouseCoopers in 2007, with the merger of RSM
and took on the role of Joint Tax Leader in 2009. He has over 30 years of
experience and is an expert in cross-border tax issues, investment structuring,
including mergers and acquisitions. Besides advising top multinational clients,
Ketan has authored on books on tax and regulatory issues. He is a member of
the Institute of Chartered Accountants of India.
Ketan Dalal
TAXATION
Ashima Goyal is Professor of Economics at Indira Gandhi Institute for
Development Research in Mumbai. Her research interests are in open
economy macroeconomics, international fnance, institutional economics and
development economics. Ashima is the author of many national and international
publications, and a book on Developing Economy Macroeconomics. She is also
editor of a Routledge journal in Macroeconomics and International Finance.
Her research has received many national and international awards.
Ashima Goyal
TAXATION &
TWIN DEFICITS
M. Govinda Rao is a former Director of National Institute of Public Finance
and Policy. Besides being a Member of the Economic Advisory Council to
the Prime Minister, he has served on several advisory panels such as Member,
Expert Committee on Multilevel Planning, Planning Commission. Raos
research interests include public fnance and fscal policy, fscal federalism,
and state and local fnance. He has been a consultant to the World Bank,
International Monetary Fund, Asian Development Bank, and the UNDP.
M. Govinda Rao
TAXATION
Mukesh Bhutani is Managing Partner of BMR Legal and non-executive
Chairman of the frm. With a specialisation in corporate international tax and
transfer pricing, Mukesh has over 30 years experience in advising Fortune
500 multinationals and Indian business houses on a wide range of matters
relating to FDI policy, entry strategy, business re-organisations, cross-border
tax structuring, tax controversy and regulatory policy across a range of sectors.
Mukesh Bhutani
TAXATION
Dr. Arvind Virmani is president of the non-proft organization Chintan and
non-resident senior fellow in the Global Economy and Development program.
Previously, he served as chief economic advisor to the Indian government and
executive director of the International Monetary Fund. His research focuses on
the Indian economy, policies for growth, economic development and global
governance.
Arvind Virmani
TWIN DEFICITS
Jaithirth Rao, popularly known as Jerry Rao, is Executive Chairman of Value
and Budget Housing Corporation (VBHC), an affordable housing venture. Rao,
also serves as Venture Advisor at New Enterprise Associates (India) Pvt. Ltd.
Rao was the Founder, Chairman and Chief Executive Offcer of Mphasis Ltd.
He has served as the Chairman of Indias National Association of Software and
Service Companies NASSCOM. He is a veteran in consumer and corporate
fnancial services and in technology management.
Jerry Rao
URBANISATION AND HOUSING
Surjit S. Bhalla is the Chairman of Oxus Investments. He has worked as a
research economist at Rand Corporation, Brookings Institution, World Bank
and The Policy Group. He has also served on several committees of the
Government of India and was an appointed member of the National Statistical
Commission of India (2007-2009). Surjit Bhalla has published several academic
articles. He is also the author of four books on globalization and its effects on
the world economy.
Surjit S. Bhalla
TWIN DEFICITS
R Jagannathan, Jaggi to colleagues, is currently Editor-in-Chief of Forbes
India, Firstpost.com, and some web and print publications of the Network18
Group. With a journalistic career spanning more than 37 years, he has held
senior editorial positions in business and general publications, including
national dailies and magazines. He has been Editor or Executive Editor of
DNA, Financial Express, Business Standard, and Business World. He was the
founding Executive Editor of Business Today in the early 1990s and Business
Editor of India Today before that.
R Jagannathan
Shailaja Chandra, before being appointed as the Chairman, Public Grievances
Commission on her retirement, was the Chief Secretary of the Government
of National Capital Territory of Delhi. She has held various positions in the
Government of India in the Health, Power and Defence Sectors for 15 years.
In 2006 she was appointed as the frst Executive Director of the National
Population Stabilisation Fund, Government of India.
Shailaja Chandra
T.V. Mohandas Pai is the Chairperson of the Board of Manipal Global
Education Services Private Limited and Advisor to the Manipal Education and
Medical Group. Pai was a member of the Board at Infosys Limited, Bangalore
where he headed Human Resources, Education & Research and Administration
until 2011. Pai has also served as a member of several committees constituted
by the Government of India, the Reserve Bank of India and the Securities and
Exchange Board of India (SEBI).
T.V. Mohandas Pai
1. ADMINISTRATIVE REFORM
2. AGRICULTURE
3. CORRUPTION
4. EDUCATION AND SKILLS
5. ENERGY
6. FINANCIAL MARKETS
7. FOREIGN POLICY
8. HEALTH
9. INFRASTRUCTURE
10. INVESTMENT
11. MANUFACTURING
12. TAXATION
13. TWIN DEFICITS
(FISCAL DEFICIT AND CURRENT ACCOUNT DEFICIT)
14. URBANISATION AND HOUSING
The 14 agendas
EXECUTIVE SUMMARY
1. ADMINISTRATIVE REFORM
1. In civil services, end seniority principle for promotion; Encourage lateral entry
2. Appointments to all constitutional, statutory and regulatory authorities should be done
in a bipartisan fashion by the Prime Minister and Leader of the Opposition
3. Abolish wasteful ministries/departments; Make structures of remaining
ministries lean and effcient
4. Set time limits for bureaucratic decisions; Upload decision-making details online
5. Modernize the Police Station: Upload FIRs on a website; Interrogation
rooms to have video and audio recording
6. Fixed Tenures for critical ranks like DGPs, District SPs & SHOs; Transfers
of offcers up to SP rank to be independent of political executive
7. Abolish the collegium system of appointments of judges; Enforce judicial
accountability through audit
8. Set time limits for judicial decisions; Government should reduce its
litigation in the courts system
9. Abolish the anti-defection law for all Parliamentary votes except
Money Bills and Confdence Votes
10. Strengthen the Parliamentary Committee system; Make hearings public,
broadcast on television
2. AGRICULTURE
1. Abolish Minimum Support Prices: Move to Income Support
2. Announce a moratorium on export bans and futures trading bans
3. Invest in seed technology: Allow GM Brinjal
4. Amend Food Security Bill; reduce coverage; the move to cash transfers
5. Provide the fnancial resources for an agriculture extension offcer in each district
6. Abolish the Agriculture Produce Market Committee (APMC) Act
7. Allow farmers to manage irrigation distribution projects
8. Aid diversifcation to allied activities; Horticulture, Poultry,
Fisheries & Animal Husbandry
9. Institute a National Agriculture Insurance
10. Encourage Mechanization, leasing through cooperatives
3. CORRUPTION
1. Strong Lokpal, independent from executive but accountable to Parliament
2. All welfare programmes should be converted to cash transfers
based on Aadhaar smart cards
3. When awarding contracts for natural monopolies mining, oil and gas,
telecom spectrum the answer is a transparent auction
4. For land transactions, equalize circle rates with market rates
5. Enforce transparency in electoral funding
6. All government departments must be required to place all their rules,
procedures and forms on their website; queries (precede)
7. Minimise requirement for Affdavits and let self-attestation of
affdavits become the norm rather than the exception
8. Set a time limit for adjudicating judicial cases
9. Prescribe time limits for key bureaucratic decisions and impose stiff
penalties for not keeping information systems up to date
10. Leverage the reach of mobile phones to enforce transparency
and accountability on Government
4. EDUCATION AND SKILLS
1. Permit for-proft institutions at all levels
2. Move to Vouchers; reduce direct spending on government schools
3: Standardise Assessments: ensure every child is learning in school
4. Promote continuous teacher training so that they are in touch with the
developments in the feld and well-versed with the use of technology
5. Institute a new independent Higher Education regulator

6. Deregulate Distance and Online Higher Education

7. Allow foreign universities to set up campuses

8. Raise fees at Government-funded Universities
9. Remove apartheid between Education and Training; NVEQF,
Vocational Universities, Community Colleges
10. Reboot the Apprenticeship Act of 1961
5. ENERGY
1. Create a new ministry of energy by integrating the ministries of petroleum & natural gas,
power, new and renewable energy, coal and the Nuclear Power Corporation
2. Every unit of fuel and every unit of energy should command a market price:
subsidise the poor through direct cash transfers
3. End Coal Indias monopoly over the mining of coal; Allow domestic and
foreign investors to mine coal and sell in the open market
4. Give complete autonomy to energy PSUs like ONGC, IOC, NTPC;
Begin the process of privatization via a National Shareholding
Trust accountable to Parliament
5. Set strict time limits for environment clearances for mining and energy projects
6. Corporatise and merge state electricity discoms into a single national entity
7. Create a cross-border energy grid: tap the hydro-power potential of
neighbouring countries
8. Create ready-to-dig opportunities for exploration companies
9. Upgrade the Solar Energy Mission: target 30,000 MW instead of current
20,000 MW capacity in ten years; Encourage wind-based power
10. Address the demand side to encourage energy effciency: make the
GRIHA system of rating buildings mandatory; Impose higher taxes on
energy ineffcient household appliances and motor vehicles
6. FINANCIAL MARKETS
1. Make RBI a constitutional body independent from Finance Ministry;
interest rates should be determined by a monetary policy committee
2. Abolish Forwards Markets Commission; Bring commodities
exchanges under SEBI preview
3. Liberalise the banking market by removing all barriers to foreign
investment and privatizing state-owned banks
4. Allow 52 percent FDI in insurance; privatize government-owned
insurance companies
5. Liberalise pensions markets: Allow 51 percent investment by
foreign pension fund manager
6. Liberalise corporate bond market: integrate it with currency
and derivatives markets
7. Open up the derivatives market by ending RBI and Finance Ministry controls
to provide for investment risk-hedging
8. Restore macroeconomic balance: Commit to a reduced fscal defcit
of 3 percent of GDP in 36 months
9. Permit full convertibility of rupee on the capital account
10. Implement recommendations of the Financial Sector Legislative
Reforms Commission which streamlines and harmonises the
legal framework for Indian fnancial markets
7. FOREIGN POLICY
1. Over 5 years, increase capital expenditure on defence from
1.1 percent of GDP to 3 percent of GDP
2. Expand Indian Foreign Service: allow lateral entry; Encourage
specialization in economic issues
3. Restructure the intelligence agencies: increase coordination between
agencies and make them accountable to Parliament
4. Act tough with Pakistan: revive covert operations ability; Create
economic deterrents; Ask Pakistan to reduce its mission size in India
5. Aggressively expose Sino-Pakistan nexus in international forums
like the UN and with countries like the US and UK
6. Bring Tibet into bilateral dialogue with China; Ask for
Tibets historical independence
7. Invest heavily in roads along the China-India border
8. Sign defence pacts with Chinas East Asian rivals; Begin with Vietnam
9. Regain lost infuence in Indias neighbourhood;
Adopt a carrot and stick approach
10. Revitalise the Indo- US relationship: forge common interests on
Af-Pak region, Iran and on bilateral economic issues
8. HEALTH
1. Double Government Expenditure on Health from just under 2 percent of GDP
to 4 percent of GDP in fve years: Use additional funds innovatively
2. Create an incentive system for transfer of health-linked funds to states
3. Train a new category of para-doctors: college graduates with two years
medical training who can treat basic diseases

4. Commitment to build an AIIMS-like super specialty teaching hospital in every state
5. Restructure Union Health Ministry: create a separate department manned by
experts to focus on TB, Malaria and HIV the three biggest killer diseases in India
6. Restructure Government hospitals: contract out all non-core services
(cleaning, security, canteens etc); in particularly dysfunctional hospitals
outsource entire management on a non-for-proft basis
7. The Medical Council of India should have a 24 hour help line for receiving
complaints which must be uploaded on the web immediately
8. Set up designated consumer courts which deal only with cases of
medical negligence and spurious drugs
9. Creation of independent Technology Assessment Boards for rational
deployment, and use, of drugs and technology
10. Announce a Central Government programme to construct
public toilets on a war footing
9. INFRASTRUCTURE
1. Create a National Infrastructure Board (NIB) chaired by the Prime Minister
and co-chaired by the relevant Chief Minister
2. Separate policymaking and regulation; Set up independent sectoral
regulators to monitor user fees and tariffs
3. Merge the ministries of Roads and Highways, Railways, Civil Aviation and
Shipping into an integrated ministry of transport
4. Permit renegotiation/re-auctioning of PPP contracts
5. Enable easier fnance for infrastructure: facilitate the development of a long term
bond market, allow foreign pensions funds and private equity funds by amending
qualifcations for investment in physical infrastructure
6. Restructure NHAI to convert it into Mission Mode; Upgrade Golden
Quadrilateral from 6 lanes to 12 lanes
7. Corporatise Indian Railways; Abolish the Railway Board;
Allow private operators to run trains, stations
8. Build a high-speed Rail Network; begin with routes plied by the Shatabdi Express trains
9. Build 50 new airports in big cities, Tier 2 and Tier 3 cities/towns; Abolish aviation fuel tax
10. Privatize major public sector ports
10. INVESTMENT
1. A commitment to reduce the fscal defcit and revenue defcit by 0.5 percent per year
2. Implement the Goods and Services Tax immediately
3. Issue a Pledge: In low and stable taxation and rule of law we believe
4. Privatise PSUs, Increase Public Investment with the proceeds
5. Remove FDI caps across the board; in select strategic sectors like defence,
allow 24 percent domestic equity
6. Diversify domestic sources of capital: introduce competition in banking
and develop bond markets
7. Decentralise Approvals: Allow a single window at the state level
8. Digitise processes related to registration and clearances; make time-bound
clearances the norm rather than the exception
9. Revisit Public Private Partnerships: End the crony capitalism
10. Reform labour laws
11. MANUFACTURING
1. Declare Manufacturing priority number one for Government:
Set up a Manufacturing Board chaired by PM
2. Set a target time limit for clearances: Should not exceed 125% of time
taken in Singapore and China
3. End all tax concessions and other regulations that incentivize companies to remain SMEs
4. On labour laws, get rid of the Delhi infuence and change the Seventh Schedule
5. Reform employment exchanges: outsource to private sector
6. Amend Land Acquisition Act: Eliminate need for multiple clearances;
keep price principle intact
7. The cost of power and energy for industry should be no more than for any
other sector: end cross subsidy of rest of economy by industry
8. End protection, and preferential treatment to manufacturing PSUs
9. Support frms that are innovators; strengthen IPR regime, give tax breaks for R&D
10. Fast track the commissioning of National Investment and Manufacturing Zones
(NIMZs) and MSME Clusters
12. TAXATION
1. For individuals, income tax bands and rates should be reset; with (a) no tax on
incomes below Rs 3 lakh per annum for income earners under the age of 65 and Rs 5 lakh per
annum for pensioners, (b) 15% on the next Rs 3 lakh (c) 20% on the next Rs 6 lakh and
(d) 25% on income above Rs 12 lakh
2. Set a Corporate Proft Tax rate of 15% on profts of up to Rs 50 crore per annum and 25% on
all sums above that amount. End all exemptions, except for exports.
3. To reinforce the need for all companies to derive a much greater amount of export income
than they do now, a tax rebate of 5% should be provided on profts derived from
export income in addition to rebates on indirect taxes.
4. Amend Tax law to prevent future FMs from levying any surcharges/special levies
on income or profts taxes for special purposes or to meet exigencies in revenue shortfalls.
If exigent revenue needs have to be met that should be achieved by adjustments of rates
on indirect taxes (like Road taxes, Luxury goods taxes, GST when its implemented).
5. Introduce GST with no exemptions; set a low rate of 12 percent (Centre plus states)
6. Tax agricultural income at the same rates/slabs as income tax
7. Pledge that there will never be any retrospective change in tax laws
8. Reform tax administration: Allow tax scrutiny only with the permission of Revenue Secretary;
Use modern technology to reduce interface between tax offcial and citizens
9. Reduce arrears and settle disputes through fast track courts or through
out-of-court settlement.
10. Devolve some powers of taxation to local city Governments
13. TWIN DEFICITS
1. Announce a cap on subsidies at 0.75 percent of GDP; Lay out a roadmap
to achieve it in three years
2. Reduce the number of Centrally-Sponsored Schemes from 147 to 20. Each central
ministry like HRD, Health, Urban Development, Rural Development should be permitted just one
programme; For instance, Rural Development should be allowed a consolidated NREGA only
3. Ask the Seventh Pay Commission to downsize signifcantly the lower bureaucracy at
Class III and Class IV levels before recommending a raise in wages for the rest
4. Widen direct taxes base: Lower rates, end exemptions and tax agricultural income
5. Reform Indirect Taxes: Introduce Goods and Services Tax at the rate of 12 percent
6. Launch an aggressive privatization (not simply disinvestment) programme
7. End intervention in currency markets; Let rupee fnd its own level
8. Remove all barriers to foreign infows, both FDI and FII
9. Diversify trade: look for Free Trade Areas with non-traditional and traditional partners
10. Address non-tariff barriers (in sectors like pharmaceuticals, media, agricultural
commodities) which cause huge trade defcit with China
14. URBANISATION
1. Launch an improved National Urban Renewal Mission scheme. The objective should
be to double or nearly double investment in urban infrastructure from 0.7 percent of
GDP currently to 1.1-1.4 percent of GDP in fve to seven years
2. Increase foor space index (FSI) in cities; at a minimum double existing limits
3. Permit charter cities which run to separate rules without state government interference

4. Allow city agencies to raise their own fnances
5. Enforce public disclosure of all city government decisions
6. Redevelop slums for low-cost housing
7. Central and state public sector undertakings are some of the largest
owners of land Divest this land via auctions
8. In peri-urban and peri-metropolitan areas, ELIMINATE the need for
prior approval to convert Agricultural land to Residential land.
9. Encourage affordable housing by eliminating stamp duty for small apartments
(less than 600 sq feet) and by automating registration to eliminate transactions costs
10. Invest heavily in urban transport: every city with population
over 1 million should have a metro
1. In civil services, end seniority principle for promotion;
Encourage lateral entry

Strengths and Opportunities:
A. Several reviews of governments functioning have pointed out the need for professionaliza-
tion of recruitment process and performance reviews at all levels of central and state civil
services.
B. Merit rather than seniority at the time of recruitment ought to be criteria for all promotions.
C. Requirement of professional competencies at various levels of administration have become
complex; a large number of professionals are available and interested in working with the
government.
Weaknesses and Threats:
A. Entrenched bureaucracy and related political vested interests have resisted any signifcant
changes in the system so far.
B. Poor performance culture pervades lower echelons of government which makes perform-
ance focused recruitment and promotion diffcult.
How to get it done:
A. Appoint 2-3 panels of professionals to operationalise the various recommendations of the
13th and 15th Report of Second Administrative Reforms Commissions as well as the Com-
mittees set up by Department of Personnel and Training (DOPT), Government of India
(GOI).
B. Appoint a professional team at the Department of Personnel and Training under a young
professionally educated Minister to carry forward the reforms which reduce the tenure of
all government functionaries to 20 years, with a selection process after 14 years of service,
and introduce modern performance monitoring and reward systems.
C. Implement recommendations related to setting up of autonomous and independent Central
and State Civil Services Authority, as per the above recommendations.
D. Create teams of similar professionals with each state government with time-bound man-
dates to bring about such changes.
E. Bring contractual appointments at higher echelons of administration at the central and state
levels to get competent professionals with domain expertise and managerial experiences.
F. Create public opinion for professionally functioning bureaucracy by introducing compul-
sory social audits and client feedback for all aspects of government functioning.
Case Study:
A. Professional recruitment and performance-based promotion systems have now been intro-
duced in many countries like Brazil, Philippines, Thailand and Malaysia (not to mention
Canada, Australia and UK).
2. Appointments to all constitutional, statutory and
regulatory authorities should be done in a bipartisan fashion
by the Prime Minister and Leader of the Opposition
A. Proper functioning of government needs appropriate checks and balances. Appointments to
constitutional and statutory bodies cannot be partisan choices of the incumbent government.
B. Proper functioning of markets needs a strong regulatory apparatus which is independent
from the government and free from capture by special interests.
C. Certain bodies need specialised professionals to head them, not retired IAS offcers.
A. An incumbent government will be reluctant to part with control over crucial appointments.
B. The bureaucracy, particularly IAS, will try and protect the existing system of spoils.

How to get it done:
A. All such appointments should be made by a two member committee comprising the Prime
Minister and Leader of the Opposition.
B. All such appointees should be subject to an approval process by a relevant Parliamentary
Committee which will have cross-party representation.
C. The search process for these positions should be extended beyond the entrenched
bureaucracy to all other professions.
Case Study:
A. In the US, all crucial executive appointments have to be cleared by the US Congress, and
not simply by Presidential diktat.
3. Abolish wasteful ministries/departments;
Make structures of remaining ministries lean and effcient
A. The task of implementation of major development programmes requires more professional
competencies, and the proliferation of ministries and departments at national and provincial
levels has resulted in ineffciency and absence of coherence in developing and implement-
ing policies.
B. Several ministries have created too many posts just to accommodate a gigantic and con-
stantly proliferating bureaucracy. Posts should be rationalised.
C. The Government of India tends to be bottom heavy: too many personnel in non-productive
Class III or IV jobs. That needs to change.
D. Some ministries set up when India was a socialist economy, should be abolished. There is
no rationale for a Ministry of Steel; prices and quantities are fxed by the market.
E. Some ministries need consolidation. There should be one consolidated ministry for Trade
and Industry, rather than separate ones for Commerce, Industrial Policy and Promotion,
Heavy Enterprises, Micro, Small and Medium Enterprises.
A. Vested political interests in implementation are deep-rooted, as legislators are more
interested in patronage to their own clients (party satraps, funders, voters etc) through
contracts and tenders.
B. Competencies of administrative personnel are weak for the complex nature of policy-making
and developmental challenges, but civil services (IAS in particular) have monopolised
control of all key ministries and departments.
How to get it done:
A. Follow recommendations of the Second Administrative Reforms Commission and
the National Commission for Reforming the Working of the Constitution; the Justice
Venkatachalliah Commission submitted its recommendations to the Prime Minister in 2002
(http://lawmin.nic.in/ncrwc/ncrwcreport.htm) and the recommendations of the Second
Administrative Reforms Commission were submitted to the Prime Minister in April 2009
(13th Report in particular).
B. The above recommendations defne the roles of ministries of central government in fve
core functions, use of principles of subsidiarity for allocation of functions to state and local
governments and separation of policy-making from implementation responsibilities.
C. One of the clear recommendations is to rationalise integration of ministries with groups of
themes (e.g. merge Ministry of Urban Development with Ministry of Urban Housing and
Poverty Alleviation).
D. Create Directorates for Programme Implementation which are separated from the policy-
making functions of ministries, staffed by professionals recruited from outside the civil
services with fxed term tenures and accountability to Parliament and public.
E. Incentivise the top echelons of civil service to cooperate: bargain for big reductions in
lower bureaucracy with some minor increases in elite cadres.
Case Study:
A. The World Bank study quoted in the 13th ARC Report provides detailed examples from
Thailand, UK and other Commonwealth countries in this regard, with a methodology of
reorganisation from the current system.
4. Set time limits for bureaucratic decisions; Upload
decision-making details online
A. Second ARC made a large number of recommendations in this regard and a variety of
Task forces have been recommending the need for simplifcation of procedures in the
administration of central and state governments.
B. RTI and Service Guarantee Laws necessitate that processes, forms and storage systems
for doing daily business of government are modernised and reformed to ensure speed,
effciency, cost effectiveness, transparency and accountability.
A. Inertia and babudoms penchant for precedence continues to frustrate attempts to reforms,
including unions in public services.
B. Massive overhaul of rules of doing business and tendering/accounting systems appears
daunting; piecemeal changes introduced for out-sourcing various functions of the
government too have not yielded any positive results.
How to get it done:
A. Start with reforming business processes of PMO and larger national ministries along with
their restructuring and rationalisation with focus on outcomes, reducing the layers for the
movement of fles to maximum 3 and then overhaul Allocation of Business Rules and
Manual of Offce Procedures (as per the detailed recommendations of the 13th Report of
Second ARC).
B. Keep Comptroller and Auditor General (CAG) and Central Vigilance Commission (CVC)
on board to ensure compliance mechanisms, checks and balances and monitoring and
reporting requirements.
C. Issue orders immediately and disseminate them publicly (on the web) on reforms
undertakentake the example of change in rupee denomination to the metric system
decades ago.
D. Impose penalties on offcers responsible for unnecessary delays in decision-making.
Case Studies:
A. New Public Management systems have been introduced in large democracies two decades
ago; several state governments have made piecemeal changes in certain procedures which
can be scaled up nationally
B. In Punjab, following the recommendations of a Governance Reforms Commission, there is
a greater e-governance and strong penalties on errant offcials.
5. Modernize the Police Station: Upload FIRs on a website;
Interrogation rooms to have video and audio recording
A. It will help restore much of the lost credibility of the police.
B. It will enforce accountability on the police.
C. It will help the delivery of justice with more certainty and speed.
A. Vested interests who want to exercise infuence over police proceedings will resist.
B. Arguments will be made on the huge costs involved in upgrading technology in every
police station in the country.
How to get it done:
A. There should be automatic recording of all calls made to police stations.
B. Audio-video technology is widely available and the Centre should fund the cost for
technology upgradation in all states.
C. Use the web to ensure inter-connectivity of all police stations at the district, state and
national level.
D. Ensure that 33 percent of staff in all police stations is female.
E. Upgrade forensic techniques to global best standards.
Case Studies:
A. Law enforcement's use of audio-video technology in American criminal justice system
ranges from documenting police feld stops of suspects and their interrogations in station
house interview rooms.
B. Police forces like the Guardia Civil in Spain and An Garda Siochana in Ireland were early
technology adopters and now beneft from some of the most effcient police operations and
investigative systems in the world.
C. The Hong Kong Police Force is the worlds second and Asias frst police agency to operate
with a modern policing system.
6. Fixed Tenures for critical ranks like DGPs,
District SPs & SHOs; Transfers of offcers up to SP rank
to be independent of political executive
A. It will reduce political interference in the functioning of the police.
B. It will boost the morale of upright offcers who otherwise fear arbitrary transfers.
C. Law and order will be maintained more effectively.
A. It could, in cases, entrench an ineffcient or corrupt offcial in a particular job.
B. It will be resisted by politicians.
How to get it done:
A. Begin my amending the rules for the All India Service, IPS.
B. Set the standard in Union Territories.
C. Persuade CMs to implement.
Case Studies:
A. Ottawa Police Service has a Tenure Policy in place which is reviewed regularly. The desired
outcome of the Tenure program is that it provides a greater number of opportunities for
offcers to gain operational experience, while increasing the offcer experience on patrol.
B. The position of FBI Director has a fxed 10-year term, and the offce holder cannot be
reappointed, unless Congress acts to allow a second appointment of the incumbent. There
are no statutory conditions on the American Presidents authority to remove the FBI
Director. One Director has been removed by the President since 1972.
7. Abolish the collegium system of appointments of judges;
Enforce judicial accountability through audit
A. Judiciary cannot be run like a closed house; accountability needs to be enforced.
B. Judicial system is slow and corrupt; these measures could alter it radically.
C. The effcient delivery of justice will take centre-stage.
A. The higher judiciary will resist executive interference.
B. There is a danger of the executive establishing too much control over the judiciary:
independence of judiciary critical.
How to get it done:
A. All senior judicial appointments to be made by a National Judicial Commission, which will
contain representatives from judiciary, executive, legislature and civil society.
B. The CAG can be asked to audit the performance of various courts in the country.
C. All performance audits of judiciary should be publicly available on the internet.
Case Studies:
A. The Judges in some regions of the United States (such as Alaska, Arizona, Colorado and
Utah) are appointed by popular vote for a fxed term. Special agencies have been created to
assess the professional performance of judges who stand for re-election by holding opinion
polls among lawyers, jurists and citizens acquainted with their judicial conduct.
B. In Austria and France, judges are periodically evaluated at regular intervals that vary from
two to fve years. Such appraisals are subsequently taken into account for promotions, to
choose among the more qualifed ones and fll the vacancies.
8. Set time limits for judicial decisions; Government should
reduce its litigation in the courts system
A. Judicial delay is a big source of corruption.
B. Citizens faith in justice system needs to be restored.
C. Government is the biggest litigant in the country: almost 65 percent of cases in the countrys
courts involve the government as litigant.
A. For some complicated cases, strict time limits may be counter-productive.
B. Government has no incentive not to litigate and go into appeals in lost cases.
How to get it done:
A. Set benchmarks (timelines) for different types of cases. Any time overrun should require a
detailed explanation from the concerned judge.
B. The status of all pending cases should be online.
C. Government should look to settle disputes through arbitration and conciliation, rather than
courts.
D. The responsibility on whether to appeal a decision in government should lie with a senior
offcial, not a junior offcial as is currently the case.
Case Studies:
A. The Guyana National Assembly passed the Time Limit for Judicial Decisions Bill in
2009 which provides that a judge in a civil or criminal case shall pronounce a judgment
within a stipulated time line after the case concludes. For instance, in criminal cases in the
Magistrates Court, the magistrate is required to give his/her decision in six weeks.
B. The American Constitution restrains the Supreme Court in dealing with "Cases" and
"Controversies." For example, John Jay, the frst Chief Justice declined to advise President
George Washington on the constitutional implications of a proposed foreign policy decision.
The Courts function is limited only to deciding specifc cases. It does not provide advisory
opinions. The American Supreme Court though has "original jurisdiction" in a few cases
arising out of disputes between States or between a State and the Federal Government.
9. Abolish the anti-defection law for all Parliamentary votes
except Money Bills and Confdence Votes
Strengths & Opportunities:
A. MPs need to be able to express and vote according to their perception of national interest
on all issues. The anti-defection law states that if they vote against the direction given by
their party, they would lose their membership in Parliament. It effectively converts them
into a number to be counted as per the decisions of the party leadership.
B. MPs will have the incentive to consider various issues on their own merit as they will be
required to exercise their judgement.
C. MPs will be answerable to their electors on their parliamentary performance as they do not
have any excuse that they have to vote as per party diktat.
D. It will not bring instability as votes which can bring down an incumbent government will
be governed by an anti-defection law.

A. Party leaderships may oppose this move as it weakens their authority over their party MPs.

How to get it done:
A. This would require a Constitutional Amendment. Some MPs and parties may take the lead.
MPs may move a private member bill to bring attention to this issue.
B. Manish Tewari had introduced a private member bill that takes the middle ground. It
proposes to restrict the anti-defection law to confdence votes and money bills. Therefore,
the stability of the government is preserved while MPs can vote their conscience on other
issues.

Case study:
C. Most mature parliamentary democracies do not have the anti-defection law. In such cases,
the government needs to convince a majority of MPs on contentious issues, and may
occasionally not be able to carry Parliament with it on some issues. For example, in August
2013, the British Prime Minister lost a proposal in the House of Commons to go to war on
Syria despite his government enjoying the support of a majority of members.
10. Strengthen the Parliamentary Committee system;
Make hearings public, broadcast on television
A. Parliamentary Committees provide a forum for MPs to go into depth on issues, and seek
inputs from experts and stakeholders. Given the limited time available for the full house to
deliberate in detail on a large number of issues, committees can examine many more issues
in depth, and report back to Parliament. The system can be strengthened in several ways.
B. Provide expert research staff to each committee to enable the committee understand the
nuances of each issue, and to help them evaluate the inputs provided by expert witnesses
and stakeholders.
C. Allow the committees to summon ministers to depose before them. The minister is the head
of each ministry, and is the fnal decision maker on all policy issues. The committee system
can improve the system of accountability of the executive government to the people through
their representatives in Parliament.Televise or webcast committee meetings. Citizens will
have access to the working of committees and can engage with their representatives in a more
effective manner to raise issues of their concern. This will also increase the accountability
of MPs to their electors with respect to their participation in committee meetings.
A. There could be resistance from the government of the day which may not prefer committees
to be more effective in overseeing their work.
B. Some MPs may not like the idea that their activity in committees is made more transparent;
they may resist increased accountability to the people.
How to get it done:
A. These changes can be done by a change in the Rules and Procedures of Parliament. Such
change can be done, in consultation with political parties, by the Speaker of Lok Sabha and
Chairman of Rajya Sabha.

Case study:
A. The British Parliament has research staff attached to committees. The Liaison Committee
(which is made up of the Chairs of House of Commons Select Committees) regularly
questions the British Prime Minister, and these are webcast on Parliament TV. In the United
States, the committee meetings are open to the public, and are telecast.
AGRICULTURE
1. Abolish Minimum Support Prices: Move to
Income Support
A. It will end price distortions in the agricultural economy which perversely incentivize
farmers to grow wheat and rice (which have MSPs) at the expense of all other commodities.
B. It will help boost production of non-cereal food items, like vegetables.
C. It will put a lid on food infation since MSPs only move one way i.e. upwards. Most food
infation is in vegetables. If production increases, prices will fall.
D. An income support programme will ensure that needy farmers are compensated for any loss
in income caused by abolition of MSPs.
A. Large farmers who beneft from MSPs will protest. They are well organized.
B. There will be political opposition to what will be portrayed as an anti-farmer policy.
C. Identifying needy farmers for the income support programme will be a challenge.
How to get it done:
A. Announcement of abolition of MSP and introduction of an Income Support Programme
must be simultaneous. However, the implementation of both these policy measures could
be synchronized in calibrated steps over a period of time, so as to ensure that such a major
policy reform is not stalled by the sheer scale of the change.
B. Aadhar must be used for effective implementation of Income Support Programme.
C. The need to curb food infation an issue that pinches the majority must be used as
argument by the Government to persuade public opinion.
Case Study:
A. New Zealand provides a perfect laboratory test of life without farm subsidies. Despite
initial protests, farm subsidies were repealed in 1984. Almost 30 different production
subsidies and export incentives were ended. According the Organization for Economic
Cooperation and Development, only 1 percent of farm income in New Zealand comes from
government protection and subsidies.
2. Announce a moratorium on export bans and futures
trading bans
A. Export markets offer a better price for farmers; they ought to be allowed to beneft from it.
B. Proper, undistorted, price signals from the market are crucial for optimal sowing by farmers.
C. Futures trading is a way for farmers to get better information about potential market prices.
A. In the event of a shortage and a rise in prices, it is an easy policy option for Government to
ban exports to increase domestic supply.
B. Futures trading is an easy fall guy for Government to blame its own inadequacy in easing
supply side bottlenecks to rein in food infation.
How to get it done:
A. Formulate a robust policy to facilitate quick imports of a commodity that is in short supply.
B. Regulate commodities exchanges through SEBI (not FMC) so that there are no malpractices.
Ensure that a truly competitive environment is created to obviate any manipulation in thinly
traded, loosely regulated exchanges.
Case Studies:
A. Countries in the East African Community (EAC) have agreed to abolish food export bans
to allow free fow of cereals from surplus areas to defcit regions.
B. In China, the Dalian Commodity Exchange leads the world in a number of soybean and
plastics contracts. The sugar contract on the Zhengzhou Commodity Exchange is the
most extensively traded agricultural future or option in the world. The Dalian Commodity
Exchange is the second largest agricultural futures market in the world by trading volume.
3. Invest in seed technology: Allow GM Brinjal
A. In the next decade, land and fertilisers are unlikely to generate massive increases in
agricultural productivity.
B. Technology has already been developed, tested and deployed elsewhere in the world.
C. It can help address supply shortages and rein in food infation.
A. There will be objections on health, safety and biological diversity.
B. There will be accusations of playing to the interests of multinational companies which own
the IPR for need seed technology.
How to get it done:
A. Propagate the success of the one GM technology that has been used in India: BT cotton.
B. Permit BT brinjal which has already been tested.
C. Government can distribute seeds and bear part of the costs.
D. Encourage domestic companies to invest in seed technology; give tax breaks; R&D support.
Case Study:
A. The US, Brazil, Argentina, Canada are the leading countries to adopt GM/biotech crops.
The U.S. chose to innovate in agriculture and adopted GM maize (corn), soybeans and
cotton. India too grows a record 10.8 million hectares of Bt cotton with an adoption rate of
93%.
4. Amend Food Security Bill; reduce coverage;
the move to cash transfers
A. The current Bill covers 2-3rds of Indias population; most estimates of poverty suggest a
rate not more than 30 percent of the population.
B. Implementation of FSB in current scale will be a huge stress on fscal defcit.
C. Government procurement of wheat and rice will go up dramatically under FSB; it will
distort the open market and fuel food infation.
D. The bias towards wheat and rice in the agricultural economy must end.
E. It will prevent further wastage in the PDS system.
A. It is a recently passed bill almost every party supported it so amending it will be diffcult.
B. It will be perceived an anti-poor move.
How to get it done:
A. Make a clear identifcation of the poor; then amend FSB to focus on the poor only.
B. Eventually, the aim must be to offer cash transfers to the poor so that they can buy grain
from the open market.
C. Aadhar must be used in PDS delivery and in a future cash transfer scheme. The implementation
can be in milestone-indexed and calibrated steps over a reasonable number of years.
Case Studies:
A. Brazils BolsaFamilia and Mexicos Oportunidadesprogramme -- involve targeting and
conditions for transfers. They also share two principal goals: namely, poverty alleviation
and breaking the intergenerational transmission of poverty.
B. Chile launched the IngresoEtico Familiar (Ethical Family Payment) system in 2012 in
which the priority is to give the poorest access to labour market. Thos who get a job will
be entitled for a bonus.
5. Provide the fnancial resources for an agriculture
extension offcer in each district
A. There exists a yield gap between the best farm & the worst farm in the same village. Then
there is a yield gap between that best farm and the university farm. That must be bridged.
B. Opportunity exists today because advisory services to the farmers are not available. Services
to test soil, advice on pesticide & fertilizer use, bio manures, etc. can be given to change
available knowledge into practices and so much more.
A. Agriculture is a state subject & state governments have no money to give services.
B. Returns are too long term to interest compulsions of political parties.
How to get it done:
A. Centre can provide funds to appoint one extension offcer in every village and to back him
with a support system. It will cost 1/10 of the requirement of the food security bill.
B. Increasing awareness will transform theory into practice.
Case Study:
A. Gujarat has a very good system of agricultural extension support. The state has recorded an
agricultural growth rate much higher than the India average in the last decade.
6. Abolish the Agriculture Produce Market Committee
(APMC) Act
A. Farmers deserve access to a free market; APMCs are essentially local cartels.
B. There is already movement to delist cereals and vegetables from APMC Act.
C. Free and fair competition is the only way to rein in food price infation.
A. There will be resistance from states which implement the APMC Act.
B. String vested interests of middlemen who beneft from current system will oppose the move.
How to get it done:
A. Delist fruits and vegetables from the purview of the Act and not essentially direct it through
mandis.
B. Support the growth of alternative models through which farmers can access bigger markets.
C. Establish regulatory apparatus to oversee the functioning of these substitute models.
Case Studies:
A. In India, states such as Odisha, Bihar, West Bengal and Assam have dismantled the APMC
Act.
B. In Finland, there has been a shift towards a free market economy in the agricultural
policy since 1995, when Finland joined the European Union (EU). Between 1995 and
2005, the number of family farms and farmers in Finland declined by one third. However,
as a member of the EU, Finnish agriculture is still strongly subsidized.
7. Allow farmers to manage irrigation distribution projects
A. The delivery effciencies of canal based irrigation in India are poor. Wastage of water is
high and irrigation is generally not controlled leading to severe restrictions in cropping and
technology choices.
B. Studies show that farmer managed modernization and operation programs for levels below
distributaries can double irrigation effciencies. It should be possible to extend this program
to a million hectares.
A. There is a hesitation on the part of irrigation authorities to decentralize power.
How to get it done:
A. Financial resources for irrigation from Centre to State should be directly linked to
decentralization.
B. Leverage Pachayati Raj institutions to devolve functional and fnancial autonomy for
irrigation projects.
Case Studies:
A. In Nepal, farmer-managed irrigation systems have achieved a high average level of
agricultural productivity. These are not necessarily small in size; some of them, in fact,
cover a service area of more than four thousand hectares.
B. In China, most irrigation systems are managed privately, not by the state.
8. Aid diversifcation to allied activities; Horticulture,
Poultry, Fisheries & Animal Husbandry
A. As the economy expands in India; there will be unparalleled demand of produce of animal
husbandry, fsheries, poultry & horticulture etc. and not from cereals coming out of crop
sciences.
B. Proftability and opportunity is more for small and marginal farmers, and time lag to return
is less.
A. Too much debate focused on crop sciences.
B. No breakthrough in research.
C. Competition from imports will be a limiting factor in the future.
How to get it done:
A. Offer a nominal interest loan from NABARD for farmers to acquire one good quality
animal depending on local land and weather conditions.
B. Give proper vet advice in every place at nominal cost.
C. Focus on quality not quantity as is presently done other things will follow automatically.
Case Study:
A. Denmark, a very small country, is a powerhouse in agricultural exports with an explicit
focus on animal husbandry.
9. Institute a National Agriculture Insurance
A. Agriculture insurance will revolutionize agriculture as it will enable farmers to experiment
and diversify to better crops and adopt latest technology more readily thus enabling more
optimum utilization of inputs.
B. Will de-stress farmers and make farming a preferred option for youngsters.
A. Too complicated to deliver in the initial stages.
B. Diffcult to monitor.
How to get it done:
A. Government must pay part or whole premium for farmers accepting policy against crop
failure.
B. Look at plantation crops models.
C. Make a credible regulatory mechanism to enforce claim settlement by farmers.
Case Studies:
A. Andhra Pradesh has Village as Insurance Unit scheme in all the districts of the state
from Kharif 2008 season onwards. It provided more benefts to the farmers as the losses in
smaller area would be more representative. The crops for the village level implementation
are selected based on the cropped area under the principal crops. In the country, National
public agricultural insurance company AICI is jointly reinsured by central and state
governments
B. In Mexico, National public reinsurance company (Agroasemex) provides voluntary
reinsurance to private agricultural insurers and global reinsurers.
C. In Canada, Government insurance is shared between provincial and central governments
with some global reinsurance participation
10. Encourage Mechanization, leasing through cooperatives
A. Most farmers fall into debt traps. Owning machinery contributes to the cause. 99% of all
farmers are buying machinery they will not be able to use for optimum time because of
small holdings. For example sowing machinery, a farmer will not use it for more than 4
days in a year, but will buy the equipment, so cannot afford it. This gives an opportunity to
explore.
A. No formal institutional funding or structure is available.
B. Will require interest free funding of machinery without government control.
C. Policy makers cannot understand the economics of owing a machine to the farmer. They
keep increasing availability of credit for owing machinery by individual farmers.
How to get it done:
A. Government should directly fund primary cooperative societies to buy machinery of their
choice and not make the mistake of giving machinery designated by government offcers.
B. Allow members of societies to make the choice.
C. Stop incentivizing machinery purchase by individual farmers, but increase manifold the
incentive for collective purchase.
Case Studies:
A. In India, there are already a number of large farmer cooperatives, for example, Mahagrapes
in Maharashtra, and commodity boards, such as those for coffee and rubber, that act as
sources of information for farmers involved in these organizations.
B. Agricultural research is not new in Brazil. Cheap labour also plays its part - but it was
investment in technology that brought the country to its position among the top agricultural
producers in the world.
CORRUPTION
1. Strong Lokpal, independent from executive but
accountable to Parliament
A. Indias premier investigation agency, the CBI has no credibility in anti-corruption probes as
it is not independent of executive.
B. Successful prosecution and sentencing of the corrupt to jail terms will act as a serious deter-
rent to corruption.
A. In the absence of proper accountability mechanisms, an independent investigation body can
run amuck, targeting even honest offcials, and paralyzing the functioning of government.
B. Lokpals investigating offcers will be drawn from the pool of Indian Police Service offcers
(and state police offcers) who are part of the corrupt system.
How to get it done
A. The head and members of the Lokpal must be chosen with bipartisan political consensus by
a Parliamentary Committee that has the widest representation of parties.
B. The Lokpal must be accountable to Parliament and must present a report is every session
detailing progress of its various investigations.
C. It should eventually aim to build its own cadre of investigators.
D. The judicial process should be kept separate from the Lokpal.
Case Study:
A. Indonesias Corruption Eradication Commission (KPK) formed in 2002 is independent
from the national police force. It has successfully prosecuted high profle offcials and
politicians.

2. All welfare programmes should be converted to cash trans-
fers based on Aadhaar smart cards
A. Aadhar-based verifcation will remove dummy names from benefciaries list, a major
source of corruption.
B. Cash transfers go straight into peoples bank accounts. They are superior to handouts which
happen through government offcials and are vulnerable to siphoning.
A. The utility of Aadhar should not be used as an excuse to expand careless welfare pro-
grammes.
B. Technological problems with Aadhar may prevent it from being a universally accepted
verifcation scheme.
C. The identifcation of targeted benefciaries is outside the ambit of Aadhar and will still be
determined by government, opening the door for corruption.
How to get it done:
A. Pass the enabling legislation for the UIDAI, with suffcient safeguards on data secrecy.
B. Announce a Commission which has a three month mandate to recommend the mechanics
of converting existing welfare programmes to cash transfers
Case Study:
A. The Bolsa Familia programme in Brazil has been hugely successful in reaching cash to
intended benefciaries. It is a conditional cash transfer programme which requires people to
fulfll certain health and education requirements for their children before they are eligible.
3. When awarding contracts for natural monopolies -
mining, oil and gas, telecom spectrum - the answer is
a transparent auction
A. Any discretionary system, including frst-come-frst-serve opens the door for rent seeking
and corruption. Competitive bidding will eliminate that.
B. A market-based distributions system will ensure that best, most effcient use is made of
precious resources.
C. A fscally constrained government can use it to generate much needed revenue.
A. Auctions should not degenerate into a blanket revenue maximization exercise. By setting
unreasonably high base prices for bidding, like in telecom, resources may not end up being
used at all.
B. In the case of some natural resources like water, the carry through impact of auctioning on
fnal consumers may need to be regulated. Again, the best way is to give the needy a cash
subsidy rather than price control.
How to get it done:
A. Issue an executive order binding all ministries that dole out natural resources to holding
auctions. End ministerial discretion in this exercise altogether.
B. Let independent regulators, rather than the ministries, recommend appropriate base prices
after accounting for different policy goals.
Case study:
A. The public tendering of oil drilling rights has worked well in post-confict governments of
Mozambique and Angola. Brazil awarded a giant offshore oil block to a consortium includ-
ing Petrobras, Shell, Total and two Chinese companies though its frst oil auction in Oct
2013.The Myanmar government opened an auction of 30 offshore oil and gas blocks in
2013 to attract foreign multinational companies.
4. For land transactions, equalize circle rates
with market rates
A. The gap between low circle rates and high market rates is the leading reason for the genera-
tion of a large amount of black money and corruption in the system.
B. It is in the interest of the vast majority of people who are looking to become home owners,
so that there is a natural constituency which will support it.
A. It will disturb vested interests in real estate, who thrive on the current system even while
depriving the exchequer of legitimate revenue.
B. As long as political funding is linked to real estate, any reform of the land market will dis-
turb vested political interests
How to get it done:
A. Form alliances with state governments. Link it with a grand bargain on extra (more de-
volved) funding to states
Case Study:
A. The most notable and successful example of land reforms in India are in the states of West
Bengal and Kerala. South Korea, Japan and parts of India enacted reforms that are also
viewed as successful by experts.
5. Enforce transparency in electoral funding
A. Opaque political funding is the biggest source of corruption. It needs correction.
B. Conficts of interest between receipt of funding and decision-making in government will
be exposed.
A. A. It will be resisted by all political parties.
How to get it done:
A. Make it compulsory for all parties to declare every source of funding, from Rs 1 upwards
on their website.
B. Offer a grand bargain: no limits on raising funding in exchange for full transparency.
C. Introduce strict penalties, possibly fnancial, for non-adherence to full transparency.
Case study:
A. No country has evolved a satisfactory mechanism to ensure full transparency.
6. All government departments must be required to place all
their rules, procedures and forms on their website;
queries (precede)
A. The asymmetry of information between government and citizens is a source of rent seeking
and corruption for offcials. The information gap needs to be bridged.
A. It will be resisted, particularly by the lower bureaucracy which derives its power and privi-
leges from this asymmetry of information.
How to get it done:
A. An order from the Prime Ministers offce would be suffcient.
B. Place one Joint Secretary level offcer in charge of the exercise. Penalise that offcial if all
the information is not uploaded on the web in a defned period.
Case study:
A. In most advanced economies, like the US and UK, all such information can be found on the
website of various government departments.
7. Minimise requirement for Affdavits and let
self-attestation of affdavits become the norm rather
than the exception
Strengths and Opportunities
A. The law doesnt require affdavits in more than a dozen specifc instances.
B. Self-attestation works well in parts of India where it is already allowed.
A. The incumbent bureaucracy will put up stiff resistance.
How to get it done:
A. Extend it across all government departments in one go.
Case Study:
A. In NOIDA in the National Capital Region, the quality norms of buildings can be certifed
and attested by architects.
8. Set a time limit for adjudicating judicial cases
A. Judicial delays are a great source of corruption not just in politics and bureaucracy, but also
in the judiciary.
B. Apart from eliminating corruption, it will restore faith in the rule of law, so its crucial for
the proper functioning of a capitalist democracy.
A. The judiciary will protest citing the burden of a large number of cases.
B. There is a small probability of miscarriage of justice if trial has to be expedited. It creates
some room for error.
How to get it done:
A. There should be only two levels of appeal.
B. Cases where the government is a litigant, and this is the majority, must be handled through
super- fast courts.
C. Government should minimize its own litigation by choosing conciliation in several cases.
D. Names of those in custody but not produced before the court should be available on the
Internet. The information on this count should mention the charge, the maximum sentence
for the offense, and time already spent by under trial in prison. If the person has spent more
time in prison than the maximum sentence would allow for, the person should be released.
E. Monitoring mechanism should be on the internet so that the general public knows the status
of all cases.
Case Study:
A. In advanced democracies like the US, appeals are not entertained by higher courts unless
there is a clear miscarriage of justice or gross misinterpretation of the law.
9. Prescribe time limits for key bureaucratic decisions and
impose stiff penalties for not keeping information
systems up to date
A. Delays in routine decision making for essential services (like passports, birth certifcates,
death certifcates, and clearances for industries) are a major source of corruption.
A. It will be resisted by the bureaucracy.
How to get it done:
A. Ask concerned ministries to submit, within 100 days, reasonable time limits for the deci-
sions they are in charge of. For example, there should be a 30 day limit for issuing pass-
ports. There should be a 45 day limit for a decision on environment clearance.
B. All delays should be put up on the website with explanations as to why the delay has hap-
pened.
C. Appoint a point person in each department (a senior offcial) who is responsible for keeping
information system up to date.
Case Study:
A. Singapore and Hong Kong had the most effcient bureaucracies, according to the survey of
expatriate business executives by the Political and Economic Risk Consultancy (PERC) in
2010.
10. Leverage the reach of mobile phones to
enforce transparency and accountability on Government
A. Internet penetration is still low in India but mobile phone ownership is virtually universal.
B. Instead of paying bribes for key services, citizens should be allowed to make complaints
over SMS which should be responded to within set time frames.
A. The technical backbone will need to be built. The Aadhar example shows it is not easy and
may take time.
How to get it done:
A. Hire expertise from Indias top notch IT sector to set up systems.
B. Mobilise public opinion around this exercise, more aggressively than has been done for
Aadhar.
Case Study:
A. In the 2012 United Nations ranking of e-government survey rankings of its 193 member
states, the Republic of Korea emerged as the world leader, scoring 0.9283 on the index fol-
lowed by the Netherlands (0.9125), the United Kingdom (0.8960), Denmark (0.8889), and
the United States (0.8687).
EDUCATION AND SKILLS
1. Permit for-proft institutions at all levels
A. Given fscal constraints and limitations of not-for-proft sector, it is necessary to expand the
number of schools-only way to reap demographic dividend.
B. Private sector, operating for proft, will churn out better services to attract paying custom-
ers.
A. Challenge of maintaining equity because only the rich will have access.
B. Populist politicians and other vested interests will oppose it.
How to get it done:
A. If for-proft institutions are allowed in other public services like health, there is no logic to
deny it in education.
B. Lease out the existing government schools infrastructure, either fully or partially (possibly
through evening schools), under a public-private partnership model.
C. Enact an enabling legislation at the Centre. Let modalities be worked out by states. That
will reduce the blowback from resistance on Centre.
Case study:
A. Among emerging economies, Brazil permits for-proft education institutions. The Govern-
ment ensures that they comply with regulatory standards by ensuring that students on Gov-
ernment-scholarships (a substantial number) only attend institutions which are compliant.
2. Move to Vouchers; reduce direct spending on
government schools
A. It will give parents and pupils choice, instead of the current approach of handing out rights
which guarantee neither quantity nor quality.
B. It will help improve quality of schools, both government and private, through competition.
A. Finding an appropriate delivery mechanism which will reach intended recipient without
leakages.
B. Need to build many more schools so that the numbers are enough for demand.
How to get it done:
A. Piggyback on Direct Benefts Transfer for implementation. It can be rolled out immediately
with the LPG subsidy and scholarship transfer schemes.
B. Mobilise public opinion around the concept of choice. The failure of RTE to deliver supe-
rior outcomes should be highlighted as an inherent limitation of a rights-based approach.
Case Study:
A. Vouchers have been used successfully in some Latin American countries like Chile and
Colombia, where research has found voucher schools outperforming regular government
schools.
3. Standardise Assessments: ensure every child
is learning in school
A. Low-stakes assessments can provide continuous feedback to the stakeholders in the sys-
tem-teachers, principals, and policymakers-on where corrective action is required.
B. Assessment results can help remediate learning defcits and improve system accountability.

A. Current focus is on measuring inputs: NCERT-administered District Information System of
Education (DISE) tracks over 100 characteristics of primary schools across the country, but
not learning levels of students.
B. Capacity building required for education offcials in order to equip the administration to
generate and use key data on school outcomes to guide interventions that improve student
achievement.
C. Globally, Indian cities ranked second to last on the 2009 PISA, a worldwide assessment
conducted by the OECD. Need to benchmark our performance against the best interna-
tional systems.
How to get it done:
A. Create a robust Education Quality Indicator (EQI) Framework to monitor progress on pro-
viding quality education to all children.
B. Administer nationwide Standardized Assessments in Classes 3, 5, 8 and 10 that test chil-
drens conceptual understanding and provide information on whether every child in school
is actually learning.
C. Develop a School Rating Index that compares student performance across schools.
D. Amend RTE so that there is less focus on inputs and more on output.

Case Study:
A. Brazil, as part of its education reform in 1996, created an evaluation System for Basic
education (SaeB) for grades 4, 8 and 11. Over time this assessment system changed from
a sample examination to a census examination called Prova Brazil, taken by all students in
grades 4 and 8 in public urban schools. SaeB ensured that schools, municipalities and states
would receive data that would tell them how their students fared on an examination of the
curriculum standards in Portuguese and Mathematics set by the federal government. The
government also provides each secondary school with information on the progress it needs
to make to match the average PISA performance level by 2021. Brazil has since made sig-
nifcant progress in its PISA score from 2000 to 2009.
4. Promote continuous teacher training so that they are in
touch with the developments in the feld and well-versed with
the use of technology
A. This will enable teachers to be in touch with the developments in their feld and the indus-
try.
B. This will enable them to be well-versed with the use of technological tools that will en-
hance education delivery.

A. The current educational system lays a lot of focus on teaching to complete the syllabus
rather than teaching so that students learn.
B. Education has become a life-long learning necessity. Unless teachers keep pace with this
changing need, they will not be able to foster the culture of life-long learning.

How to get it done:
A. Public-Private-Academia partnerships.
B. Incentivize teachers.

Case study:
A. Campus Connect program by Infosys.

5. Institute a new independent Higher Education regulator
A. Best way to free higher education from the regressive control of Union HRD Ministry.
B. Will lead to abolition of UGC, AICTE, MCI which have been mired in corruption and in-
competence.
C. Will constitute the necessary regulatory structure for the entry of for-proft private institu-
tions and other private and government institutions.
A. It should not become a new institution of licence-raj.
B. It should not be taken over by retired academics but should be staffed by eminent academ-
ics.
C. It will be resisted by ministries like Health and Law which control education in medicine
and law.

How to get it done:
A. Appoint a reformist HRD minister who is willing to cede turf. Appoint Health and Law
Ministers who are on board with reform of medical and law education.
B. Legislation is already drafted. The National Knowledge Commission also has a ready-to-
use blueprint.
Case study:
C. Australias Tertiary Education Quality Standards Agency (TEQSA) is an independent regu-
lator of higher education. It was established recently in 2011 and can thus be a good role
model for a late-starter like India.

6. Deregulate Distance and Online Higher Education
A. Only 8 million people pass the Class 12th exam every year of which only 5 million go to
College. Indias Gross enrollment in higher education is half the developed country average
and considerably lower than other developing countries.
B. India faces the impossible trinity of cost, quality and scale.
C. The biggest constraint is teachers across the country and we have to fgure out how to lever-
age the good ones.

A. The current framework for distance education restricts universities to state boundaries.
B. The regulatory framework for distance education is in fux since the Distance Education
Council was dissolved.
C. Distance education has not been completely freed from face-to-face requirements.
D. Online courses by startup universities are being offered globally (MOOCs) and can even
be taken by students in India but Indian universities are not able to offer them because of
the regulatory fog.
How to get it done:
A. Deregulate distance education completely; allow all public and private universities to offer
their courses all across India.

Case Studies:
A. Massive open online courses (MOOCs) like Coursera, Edx, Udacity.
B. Open University of UK.

7. Allow foreign universities to set up campuses
A. It will raise the supply of seats in higher education, desperately needed.
B. It will create competition as students get more choices. Quality across the system is bound
to improve.
A. There is a risk of some less than superlative universities setting up campuses in India.
B. There will be a protectionist backlash from some politicians and left-leaning academics.
How to get it done:
A. The setting up of an independent regulator staffed with high quality experts will regulate
standards, but not entry and exit-that will only create a new licence raj.
B. Build public opinion in favour of foreign universities by arguing in favour of the need for
greater quantity of universities if Indias youth are to be employed. Students and parents are
key constituencies which must be mobilized in support.
C. A draft bill to allow foreign universities is already in Parliament. Make amendments if
necessary and pass it.
Case study:
A. Indias competitor nation China has welcomed the setting up of foreign universities for
over a decade, particularly from English-speaking countries which have improved supply
and quality of education.

8. Raise fees at Government-funded Universities
A. Indias best universities will continue to be state-run in the foreseeable future. It is essential
to upgrade their standards, particularly physical infrastructure without using government
funds.
B. It will enhance equity. Those who can afford to pay should not be subsidized. The genuinely
needy can be given scholarships (the will be the KEY to have a successful and signifcant
scholarship model such that there is almost 100% access for deserving/needy students.)
A. There is a danger that the Government will continue to interfere in their functioning and
academic standards.
B. Populist politicians, activist teachers and misguided students will rise in uproar and try to
block change.
How to get it done:
A. Government should simply give full autonomy to Government Universities in all matters,
including the setting of fee. That way the onus of change, and blowback from resistance,
will be on individual universities rather than government.
B. Use the argument of equity and fscal constraints to convince public opinion.
Case Study:
A. In higher education, user charges are common in several emerging economies. That is
because students of higher education generally get a good return on their investment com-
pared to those who have completed only primary or secondary school.
9. Remove apartheid between Education and Training;
NVEQF, Vocational Universities, Community Colleges
A. The social signaling value of vocational training is low; it is for other peoples children.
B. The employability of a large chunk of graduates is very low.
C. Almost 105 lakh and 80 lakh students fail the Class 10 and Class 12 exam every year.
There are few formal on and off ramps back into the formal system for them.
D. Most jobs in the future require the right balance of skills and knowledge.
E. We need to create mobility between certifcates, diplomas, associate degrees and full de-
grees.

A. Academics believe that the world of knowledge and skills should be kept separate.
B. The Ministry of Labour legislates skills while MHRD regulates education; the enabling
legislation for mobility NVEQF (National Vocational Educational Qualifcation Frame-
work) is stuck in a turf war between the two ministries.
C. Currently higher education legislation does not allow granting credit for on-the-job-train-
ing (apprentices) and it makes recognition of prior learning very diffcult.
How to get it done:
A. Immediately get the inter-ministerial issues around NVEQF resolved and recognize one
framework.
B. Get UGC to notify two year associate degree programs under recognized degrees and rec-
ognize apprenticeships as classrooms.

Case Studies:
A. 50% of college enrollment in the US is in community colleges that offer two year associate
degree programs.
B. 40% of high school leavers in Germany and Austria enter the labour force through an ap-
prenticeship.

10. Reboot the Apprenticeship Act of 1961
A. India only has 3 lakh apprentices while Germany has 4 million, Japan 10 million and China
20 million.
B. The learning by doing and learning while earning of apprenticeship are a powerful
vehicle for skill development.
C. The biggest challenge for skill development is the gap between what employers want and
what education provides; apprentices narrow that gap in real time.
D. This issue has been long recognized as an important agenda; it was the 20th point in Indira
Gandhis 20 point program in 1975.
E. Non-engineering graduates (80% of graduates) are not covered under the current regulatory
regime.

A. The Apprenticeship Act of 1961 was written for a very different Indian labour market and
has a lot of constraints.
B. The mandate for implementation of the Act is split between the Ministry of HRD and the
Ministry of labour.
C. Employers view many of the penal provisions in the Act (Jail etc) as draconian and there-
fore choose not to engage with it.
How to get it done:
A. We need to urgently amend the Apprentices Act of 1961 as the per report of the Planning
Commission (http://planningcommission.gov.in/reports/genrep/skilldev/sbcom_app.pdf).
B. This includes solving the regulatory, administrative, marketing, and other issues highlight-
ed.
C. We need to revamp the Board of Apprenticeship Training (BOAT) of MHRD fnancially,
organizationally, technologically etc.
Case Study:
A. The apprenticeship regimes of Germany, France, Singapore and Australia.
ENERGY
1. Create a new ministry of energy by integrating the
ministries of petroleum & natural gas, power, new and
renewable energy, coal and the Nuclear Power Corporation
A. It will allow the government to frame a coherent energy policy that cuts across different
sub sectors.
B. It will end the coordination problems and turf wars between existing ministries which often
work at cross purposes.
A. It will mean that the jobs of four cabinet ministers will be reduced to one.
B. It will be resisted by the bureaucracies in each of the ministries.
How to get it done:
A. An executive order announcing the merger of the 4 ministries (plus one PSU) as soon as the
PM is sworn is, before the cabinet portfolio allocation is made.
B. A minister of state must be appointed for each sub-sector who can be responsible for the
execution of projects in that sub-sector even as the cabinet minister frames overall policy
and ensures coordination.
Case Studies:
A. In Germany, the Federal Ministry for Economic Affairs and Energy has the lead responsi-
bility for the formulation and implementation of Energy policy.
B. The US and UK have unifed ministries of energy.
2. Every unit of fuel and every unit of energy should com-
mand a market price: subsidise the poor
through direct cash transfers
A. It will help contain the governments fscal defcit.
B. It will help the rational use of energy resources as people moderate their consumption ac-
cording to market prices.
A. It will be viewed as an anti-poor, anti-middle class move.
B. It will be near impossible to forge a broad political consensus on it.

How to get it done:
A. Announce an immediate and complete deregulation of diesel prices. To make this politi-
cally acceptable, the current scheme of 50 paise adjustment per month should be consider-
ably accelerated, perhaps to Rs 1-2 per month.
B. Government should end the practice of dictating the prices of petrol and diesel to oil PSUs.
C. Announce an in-principle end to subsidies for LPG and kerosense with the assurance that
these will be phased out only when a direct cash transfer subsidy scheme for the poor is
implemented. Announce a tight time-table along with the launch of several closely moni-
tored and scalable pilot projects.
D. Use Aadhar to fast track the implementation of cash subsidy scheme for the poor.
Case Studies:
A. Russia announced plans to raise regulated natural gas tariffs on the domestic market by
15 percent for all users from July 2013. China announced that oil product prices would be
adjusted every 10 working days to better refect international prices from March 2013.
B. Subsidies to coal producers, for example, have been phased out or reduced sharply in recent
years in several OECD countries.
3. End Coal Indias monopoly over the mining of coal; Allow
domestic and foreign investors to mine coal and sell in the
open market
A. As a monopoly that makes super-profts, Coal India has no incentive to ramp up production
to the levels Indias energy sector needs.
B. Indias power sector is predominantly dependent on coal. Captive mining by private sector
is not a substitute for open competition in coal mining.
C. Indias balance of payments has suffered because of excessive imports of coal despite suf-
fcient domestic reserves.
A. Coal India will resist and try and protect its monopoly status.
B. Domestic interest groups will resist opening coal mining to foreign investors.
How to get it done:
A. By creating a unifed ministry of energy, the Coal Ministrys resistance to opening their
prized PSU to competition will be reduced.
B. Offer Coal India full managerial autonomy in return for putting them on a level playing
feld.
Case Study:
A. Australian Federal Treasurer Joe Hockey removed foreign investment conditions on the
ownership of Yancoal Australia Limited in 2013. The riders were earlier placed on Yanzhou
Coal Mining Company, a Chinese state-owned enterprise, in 2009, including reducing its
ownership in Yancoal, which operates mines in NSW and Queensland, from 100% to less
than 70%.
4. Give complete autonomy to energy PSUs like ONGC, IOC,
NTPC; Begin the process of privatization via a National
Shareholding Trust accountable to Parliament
A. The problem is not ownership per se. The problem is the consequence of ownership. Gov-
ernment ownership inducts both sloth and corruption into the management of public sector
units; Government is still a major player in energy.
B. The cohabitation of government ownership in sectors opened to private investment has only
enhanced renting as is evident in the civil aviation sector - and arbitrage opportunities in
coal and power, for instance -- thanks to ineffciencies embedded through ownership.
C. Public ownership in its truest sense will enhance accountability, investment and effciency
through competitive practices.
A. Ministers will resist an erosion of their turf of patronage.
B. There will be a political storm over privatizing proftable PSUs, even though these profts
are because of protection not competitiveness.
How to get it done:
A. The government could transfer its holdings in the PSUs to a trust something like the Na-
tional Shareholding Trust suggested to the NDA regime by the Disinvestment Commission.
B. The PSUs would be out of ministerial stranglehold, under professional managers and the
Trust could be brought under Parliamentary oversight. The trust would in phases offoad
governments holding from current to 51 percent and to the critical 26 percent to employ-
ees, mutual funds, insurance companies and even a strategic investor to induct technology.
C. At a later stage, consider strategic sales of particular PSUs.
Case Studies:
A. During the Margret Thatcher years, more than 50 companies in UK were sold or privatised
including power and water industries, raising more than 50bn for the Exchequer.
B. The Central Electricity Generating Board and 12 regional boards in England and Wales
were renamed Regional Electricity Companies and privatised in December 1990. CEGBs
non-nuclear generation was carved up between National Power and PowerGen and priva-
tized the following year.
C. Peru's Congress approved the privatisation of up to 49% of state energy frm Petroper on
December 12th, 2013 as part of a government plan to expand refning capacity. Petroper
will also be restructured to gain access to capital markets.
5. Set strict time limits for environment clearances for
mining and energy projects
A. The Union Ministry of Environment has emerged as the biggest roadblock to mining and
energy projects in recent years.
B. While environment issues are important, delays over clearances are not.
C. Investors want certainty.
A. Environment ministry will resist any encroachment on its turf.
B. Environment NGOs could launch a campaign against this decision.
How to get it done:
A. Appoint an environment minister who appreciates the need to balance the needs of fast
growth and protection of the environment.
B. Tie in time limits for environment clearances with the agenda of broader reform of the bu-
reaucracy. That way environment ministry bureaucrats wont feel singled out.
C. Impose fnancial penalties on offcials responsible for delays.
Case Studies:
A. Brazilian mining frm Vale has cleared a major hurdle in its plans to build a railway to
serve the new Carajas Serra Sul (S11D) mine in the state of Para after the project was
granted environmental approval by the federal government.
B. Spain altered environmental policies to speed approvals on industrial projects from pig
farms to oil rigs and will regulate shale drilling. Explorers including BNK Petroleum Inc.
(BKX) of Canada and San Leon have set up Spanish offces to explore shale resources,
which have revolutionized natural-gas production in the United States.
6. Corporatise and merge state electricity discoms into a
single national entity
A. Generation must be ramped up to 800,000 MW by 2030 to sustain 8 plus per cent GDP
growth.
B. This cannot be achieved if SEBs are persistently bankrupted by state governments.
C. Accumulated losses of SEBs are over Rs 190,000 crore -- of which 50 per cent are subsi-
dies not paid for by the states (whereas Section 65 of Electricity Act 2003 specifes subsidy
must be paid by states to utilities in advance) and the rest is a mix of commercial losses and
theft. National average for T&D losses is 25 per cent (35 % in nine states). This is clearly
is unsustainable.
A. States will resist ceding control and letting go of the attendant freebies.
How to get it done:
A. HIVE off the Distribution arms of SEBs, corporatize and merge them into one national
entity and list them, insulating them from political profigacy.
B. INSURE receivables by inducting a clause for direct deduction from centre-state transfers
endorsed by Finance Commission.
C. The new grid will continue to distribute power and sign PPAs. Its size will enable better
fnancial engineering.
D. Give a strong opt-in option to states. The Centre will buy out the state discom (based on
a reasonable valuation) which will result in transfer of resources to the state in lieu of the
energy asset.
Case Study:
A. The electricity industry operates a single wholesale market across Ireland known as the
Single Electricity Market or SEM. Electricity across the island is bought and sold through
a single pool, which has augmented competition, effciency and security of supply. The
operation of this market is facilitated by the Single Electricity Market Operator (SEMO).
SEMO is a contractual joint venture between the two system operators - SONI in NI and
EirGrid Plc their counterparts in the Republic of Ireland.
7. Create a cross-border energy grid: tap the hydro-power
potential of neighbouring countries
A. The Himalayan region has an immense potential for hydro power if harnessed intelligently.
India could harness as much as 70,000 MW of hydro power in partnership with Nepal and
Bhutan as also with Bangladesh.
B. There is also the potential of bringing power-starved Pakistan into the grid if it can land gas
from Iran.
C. This will enable India to lessen dependence on fossil fuel imports, deliver a better mix in
terms of costs and reduce carbon footprint.
D. It will deliver energy and income to the neighbours.
A. Indias diplomatic relations with neighbours, particularly Nepal, Bangaladesh and Pakistan
have deteriorated in recent years. There is a trust defcit.
B. India will have to fnance whatever additional infrastructure is necessary to complete the
transmission grid.
How to get it done:
A. Existing collaboration with Bhutan and Nepal illustrates the potential of generating power
in neighbouring countries, sharing equity power and carting it on the Indian grid.
B. There is merit in creating an international power company (and an independent sub-conti-
nental grid) with Nepal, Bhutan, Bangladesh, Pakistan, Sri Lanka and even Myanmar. The
equity could be a hybrid of cash and resources and power carted onto the grid could be
priced appropriately and shared.
Case Studies:
A. The proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline is ex-
pected to be completed by 2017. The pipeline will transport Caspian Sea natural gas from
Turkmenistan through Afghanistan to Pakistan and India.
B. ASEAN (Association of Southeast Asean Nations) has an energy cooperation plan, with
its frst phase running from 2010-15 to build gas pipelines (Trans-Asean Gas Pipeline)
(TAGP) and power grids connecting member countries for the purpose of trade as well as
enhancing energy security.
C. The Trans-Thailand-Malaysia Gas Pipeline was commissioned in 2005, which allows Ma-
laysia to transport natural gas from the Malaysia-Thailand Joint Development Area to its
domestic pipeline system.
D. China received Kazakh and Russian oil from a pipeline originating in Kazakhstan when its
transnational oil pipeline was inaugurated in May 2006. The 200,000 bbl/d pipeline spans
620 miles, connecting Atasu in northern Kazakhstan with Alashankou on the Chinese bor-
der in Xinjiang. China has also revived its plans to construct an oil import pipeline from
Myanmar through an agreement signed in March 2009.
E. Russian state-owned oil giant Transneft began construction in April 2006 of a pipeline that
will extend 3,000 miles, from the Russian city of Taishet to the Pacifc Coast. Known as
the Eastern Siberia-Pacifc Ocean Pipeline (ESPO), the project will be completed in two
stages.
8. Create ready-to-dig opportunities for
exploration companies
A. India needs to desperately ramp up production of fuels. Availability and affordability lead
to productivity.
B. Indias economy cannot afford the dependency it currently operates under. It imports nearly
80 per cent of its petroleum needs and over 100 million tonnes of coal besides gas and
uranium. This dependency is not sustainable -- in terms of the geopolitics and economics.
C. Investor interest is always seasonal given the plethora of competing opportunities. Time
take from interest to returns is critical. Most importantly, India can neither afford to go
through the Jurassic process and wait for exploration to deliver nor can it afford the cost
vagaries that come with imports.
D. The investment regime is pocked with irrationality. Pricing, marketing, end-use are all de-
termined by the government.
A. There will be accusations of favourtism to private explorers.
B. Bureaucracy will try and out hurdles in the process.
How to get it done:
A. Ready-to-dig-explore investment opportunities incubated by either a PSU in the domain
or an inter-ministerial group headed by the Prime Minister with all clearances should be
offered via an auction to investors.
B. There should be an escrow of guarantees and the unit could charge a fee from the investor.
C. Pricing should be market determined.
Case Studies:
A. As per IEAs World Energy Outlook 2013 Factsheet, Brazils oil production will rise from
2.2 mb/d in 2012 to 4.1 mb/d in 2020 and to 6 mb/d in 2035, making it the worlds sixth-
largest oil producer in 2035 due to its highly complex and capital-intensive deepwater
developments. Brazil is set to strengthen its position as the global leader accounting for
almost 60% of global deepwater production in 2035.
B. The U.S. Congress has passed legislation to open the way for the shale gas boom. Ground-
swell of project interest emerged as the government embraced Repsol SA (REP)s request
to explore off Spains Canary Islands and backs the development of untapped shale areas.
About 70 permits are in effect for prospecting in Spain, 80 percent higher than fve years
ago, according to trade groups.
9. Upgrade the Solar Energy Mission: target 30,000 MW
instead of current 20,000 MW capacity in ten years;
Encourage wind-based power
A. Indias energy consumption is as yet low. Per capita energy consumption is 585 kg of oil
equivalent compared to world average of 1802 kg, 1575 kg of China or 7000-plus kg of US.
Per capita electricity consumption is barely 778 kwhr compared to 2471 in China or 13647
in the US. It has the opportunity to go green.
B. With 300 days of sunshine and average temperatures of 26 degrees, solar power has huge
potential.
C. The potential of wind power onshore and offshore is huge as is the possibility of harness-
ing tidal power on the 7500 km coastline.
A. Financial viability of SEBs and political ability to champion the cause of renewables.
How to get it done:
A. The frst policy change required is fexibility in grid management. Second is digitization or
investment in smart grids. Third is the facility of metering and reverse metering. Fourth, is
the need to rewrite the incentives model step away from pure subsidies to participative
compensation.
B. Housing societies could be incentivized - extra FSI/FAR for instance -- to put up roof-top
panels and upload power to the grid. The SEB/Discom could either compensate directly or
adjust power received from power consumed through reverse metering.
C. Availability of space is an issue for solar projects. The Gujarat canal-top solar generation
illustrates possibilities. India has 28 major irrigation projects and thousands of km of canals
just the main feeders of top fve canals add up to 2000 km.
D. Indian Railways consumes over 9000 million kwhr of power and 2 billion litres of diesel
to haul its trains and over 2000 million kwhr and 33 million litres of diesel for station-
ary power. While a pilot project is looking at solar powered Duranto/Rajdhani, the bigger
potential is solar power generation using the vast real estate 6800-plus railway stations
-- under its command.
E. The possibilities are endless from getting Panchayats to invite investors/government
agencies to set up solar projects that will deliver in-situ power to NHAI examining the
potential for wind power along national highways.
Case Study:
A. In 2013, China set a record by adding at least 12 gigawatts of solar capacity 50 percent
more than any country has ever built in a single year. Chinese solar manufacturers that are
focused on silicon technologies such as Trina and Yingli or newer thin-flm entrants like
Hanergy can considerably upgrade their existing technology through imports of innovative
and advanced technology from Western countries.

10. Address the demand side to encourage energy effciency:
make the GRIHA system of rating buildings mandatory;
Impose higher taxes on energy ineffcient household
appliances and motor vehicles
A. A mix of regulation and taxation can easily achieve more effcient energy use.
B. In an energy-scarce country like India, conservation has to be part of a sustainable energy
strategy.
C. Construction, household appliances and motor vehicles are where energy is wasted because
of wrong incentives and can be conserved.
A. There are inherent dangers in government using regulation and taxation as policy instru-
ments. They can be misused or over extended.
How to get it done:
A. Regulation should set certain minimum standards of energy conservation. Like the GRIHA
ratings do in construction.
B. There is a case for taxing more heavily gas guzzling SUVs/large cars to dissuade use.
C. Invest heaving in public transport systems so that dependence on private vehicles comes
down.
Case Studies:
A. On 1 October 2012, the Greenhouse and Energy Minimum Standards (GEMS) legislation
came into effect, creating a national framework for appliance and equipment energy ef-
fciency in Australia.
B. The EU has set policy objectives in the areas of energy and climate change and has com-
mitted to achieve targets with respect to energy savings, reductions of greenhouse gas emis-
sions (GHG) and deployment of renewable energy sources by 2020. The EU has progres-
sively preferred economic or market-based instruments (MBI) such as indirect taxa-
tion, targeted subsidies or tradable emission rights for such policy purposes.
FINANCIAL MARKETS
1. Make RBI a constitutional body independent from Finance
Ministry; interest rates should be determined
by a monetary policy committee
A. This step would bring RBI in line with most central banks around the world, which are
independent constitutional authorities set up to pursue a sound monetary policy with the
primary objective of combating infation and maintaining systemic fnancial stability.
B. Setting up a monetary policy committee (MPC) will ensure plurality of opinion in deciding
the interest rates; at present, Governor is the decision-making authority.
A. The Finance Ministry will resist constitutional status to RBI.
B. It may be argued that in a democracy, RBI should be accountable to the executive.
C. If the members of MPC are appointed by the government, they can infuence policy in a
manner the government wants.
How to get it done:
A. It should be done with the frst budget; it will inject huge credibility into the fght against
infation.
B. Members of the monetary policy committee must be selected in a bipartisan manner by the
PM and Leader of the Opposition based on the recommendations of an expert committee.
C. RBI Governor should be made directly accountable to Parliament for his actions and
decisions.
Case Study:
A. The experience and practices of the fve best central banks (including the US, UK, Canada
and Europe) around the world have already been studied by FSLRC.
2. Abolish Forwards Markets Commission; Bring commodities
exchanges under SEBI preview
A. Forwards Markets Commission (FMC) lacks independence from the executive; it reports to
the ministry of consumer affairs.
B. The FMC has proved to be an inadequate regulator in light of the NSEL scam.
C. Commodities markets need proper regulation if politicians are to be prevented from
intervening and banning thin futures markets.
A. The ministry of consumer affairs and FMC will resist.
B. Vested interests in commodity trading who beneft from weak regulation will try and block.
How to get it done:
A. The FMC bureaucracy can, in part, be absorbed into SEBI as a new division.
B. SEBI can have a full-time member who specializes in commodities markets.
Case Study:
A. In Tokyo, the Commodity Derivatives Act necessitates commodity exchanges to properly
conduct self-regulatory activities for fair transactions on commodity markets and protection
of customers. The Exchange has established the Self-regulatory Committee to ensure good
governance from the viewpoint of an organization operating both as an exchange with
the public mission and a proft-seeking corporation and to aptly conduct self-regulatory
activities.
3. Liberalise the banking market by removing all barriers to
foreign investment and privatizing state-owned banks
A. It will make ALL Indian banks more effcient, cost-effective, and competitive (domestically
and globally).
B. It will make banking services more responsive to customer needs.
C. It will remove the constraint of a fnancially-strapped government from recapitalizing
banks.
D. It will enable India to export banking services.
A. There will be resistance from vested interests of GOI, PMO, Ministry of Finance, PSB
(public-sector banks) staff unions, and the political class- all of whom beneft from the
abuse of power and infuence that state-ownership of banks confers.
B. There will be concerns that privatized banks will not meet priority needs of the poorest for
savings and borrowing.
C. There will also be concerns that open entry of foreign banks being allowed to compete on
an equal footing will make India more vulnerable to external fnancial crises.
How to get it done:
A. Remove the dead hand of government from interfering in the ownership/governance of
banks; pre-empting 30-40% of deposits through SLR and CRR; and the continual misuse
of PSB lending powers, i.e. favouring so-called priority sectors, politically well-connected
borrowers, and crony capitalists.
B. Break-up SBI into four regional banks to reduce systemic risk and privatize them ASAP.
Consolidate the 17 smaller PSBs into four large banks and privatize them.
C. Allow major domestic private (and privatized) banks--whose ownership is now concentrated
in FIIs to the extent of 74% of share capital -- to bring FDI into their ownership structures
if they wish.
D. Allow 100% FDI in the banking sector providing foreign banks entering India meet
stringent tests.
E. Remove all restrictions on approval of branches and ATMs opened by any bank (including
all foreign banks operating in India). Allow the market, rather than RBI, to decide which
banks should open branches where, and treat all banks equally when it comes to branch/
ATM banking expansion.
Case Study:
A. Learn selectively appropriate lessons from best practices in the worlds largest and most
competitive banking markets i.e. the US, UK, EU, Japan, Canada and Australia.
4. Allow 52 percent FDI in insurance; privatize government-
owned insurance companies
A. It will increase competition and bring more products and choice for consumers.
B. It will boost the effciency of Indian insurance companies.
C. It will increase the penetration of insurance in India.
A. There will be resistance from vested interests of GoI, PMO, Ministry of Finance, PSI
(public-sector insurance companies) staff unions, and the political class.
B. There will be concerns that private insurers may not meet priority needs of the poorest, for
proper insurance against the risks they confront.
C. There will be concerns that domestic PSIs and domestic partners in insurance JVs will be
disadvantaged by the superior knowledge/capability of foreign insurers when it comes to
customer service, products and competition in the marketplace.
How to get it done:
A. Privatize and break-up LIC (which today poses perhaps the largest single source of
systemic risk in the Indian fnancial system and operates in an opaque manner in making its
unlisted investments), GIC and other public insurers/re-insurers into 3-4 viably large and
well-capitalized insurers that are immediately privatized. That would reduce systemic risk
signifcantly.
B. Compensate over time, through preferential tax treatment, foreign partners in insurance JVs
who have for 8-13 years borne all the capital risks of their JVs by providing their domestic
partners with capital protection and assured return guarantees varying from 12% to 24%
p.a. That has resulted in domestic partners minting money at foreign partners expense
while contributing little other than liquidity.
Case Study:
A. Learn from best practices in the worlds most competitive, large insurance markets:
especially the US, EU, Canada, Australia, South Africa and China.
5. Liberalise pensions markets: Allow 51 percent investment
by foreign pension fund managers
A. It will make the Indian pensions markets capacity more robust to meet future long-term
pension obligations (public and private) stretching out for durations over 40-50 years for
post-retirement income needs.
B. The entry of professional foreign pension fund managers (FPFMs) would transform a
PF industry in India that is incompetent, moribund and dysfunctional in meeting Indias
needs for long-term capital, mobilized through employment-related structured involuntary
savings products/plans related to salaried/earned income during working life.
C. It will make Indian Pension Fund Managers more effcient, cost-effective and competitive
(domestically and globally).
A. There will be resistance from vested interests of GoI, NPF, public sector employee unions,
and the political class.
B. There will be concerns that PFs may not meet the priority needs of the poorest for proper
future pension protection for the basic post-retirement income. That issue is proving to be
as false a concern in the case of PFs as it is with insurers and banks.
C. There will be fears that opening the entry of Indias PF market to FPFMs will make pensions
more risky, more vulnerable to market competition and disenfranchise the poor.
How to get it done:
A. Privatize and break-up NPF (which today does not earn adequate real returns to meet
future pension payout obligations) and other public sector run PF schemes.
B. Pass the new Pensions Bill with a 51 percent limit for FDI than the current bill proposes.
Case Study:
A. Learn from best practices in the worlds most competitive large PF markets especially those
of the US, UK, continental EU, Canada, and Australia.
6. Liberalise corporate bond market: integrate it with
currency and derivatives markets
A. Prioritizing rapid development of the debt/bond market, and opening it to greater
participation by corporates, PFs and private insurers, would make the entire Indian fnancial
system more effcient, globally competitive, and release a greater quantum of better quality
(in tenor) resources for productive investment (especially in infrastructure).
B. It would impose greater market discipline over public spending which is currently rampantly
populist resulting in sustained resource misuse.
C. Opening up the debt market would provide market based opportunities for long-term
borrowing on equal terms by corporates and long-gestating infrastructure projects. It would
permit participation by sub-sovereigns (i.e. states) and metro-municipalities for fnancing
public infrastructure needs.
D. It would enable market forces instead of government/political diktat to discipline public
and private capital investment/spending proclivities with more effcient outcomes.
A. Opening up the debt market on an equal footing to all borrowers would threaten the position
of government as a privileged preferred borrower and increase its borrowing costs, with a
negative fscal impact.
B. Populist politicians and other vested interests that beneft directly and indirectly by the
undue infuence that government has over fnancial markets, PSBs and PSIs will oppose it.
How to get it done:
A. Apply FSLRCs (Financial Sector Legislative Reforms Commission) recommendations to
changing debt market access/entry laws and regulations.
B. Remove the preferential position of government as a preferred borrower through pre-
emption.
C. Abandon SLR (Statutory Liquidity Ratio) and CRR (Cash Reserve Ratio) as monetary
control instruments by RBI. Resort to less primitive, debt-market focused liquidity and
monetary demand-supply management operations through better structured instruments.
D. Permit private companies, banks, insurance companies, etc full unrestricted access to open
debt markets providing they meet proper quality tests as borrowers of sound standing, and
are rated transparently by domestic and foreign rating agencies.
E. Encourage the sub-sovereign and municipal bond markets to develop gradually under tightly
controlled conditions with stringent market surveillance over the fnancial operations of
states and metros.
Case study:
A. Study and learn from how public, corporate, sub-sovereign and municipal debt securities
markets have evolved in the US, UK, EU, Japan, Canada and Australia at a similar phase in
their economic development. Apply the lessons learnt to India.
7. Open up the derivatives market by ending RBI and
Finance Ministry controls to provide for
investment risk-hedging
A. Allowing the derivatives (i.e. futures, options, swaps, CFD) market to evolve as it has in
most developed countries, without repression by RBI and MoF, would result in greater
fnancial market cost-effciency refected in reduced spreads and much better managed
risks for investment portfolios and corporate as well as public treasuries.
B. Prioritizing rapid development of the derivatives market, and opening it to greater
participation by banks, corporate treasuries, PFs and private insurers, would make the Indian
fnancial system more effcient, globally competitive, and allow for better risk management
in India by domestic investors as well as FFIs.
C. It would provide greater market based opportunities for an expanded range of long-term
fnancing options (whether debt, equity, quasi-equity, cocos, warrants and convertibles)
that were appropriately risk-hedged and managed on equal terms by all users of capital
resources.
D. A larger, deeper, better functioning derivatives market would dampen open positions that
are implicitly speculatively risky in fnancial securities as well as in commodities.
A. Opening up and liberalizing the derivatives market might threaten the instinctive command-
control proclivities of government, MoF and RBI, and raise contentious conficts with other
ministries involved in the physical production, storage and pricing of key commodities.
B. The highly limited knowledge of bureaucrats, ministers, politicians and other vested
interests that do not understand how derivatives markets and instruments work, and regard
them as over-leveraged and dangerously speculative, will affect adversely the liberalization
dynamic and process.
How to get it done:
A. Apply the Mistry Reports recommendations on liberalizing and enhancing derivative
market capacity.
B. Prevent RBI from blocking essential derivative market evolution by shifting all market
regulatory powers to SEBI.
C. Permit qualifed foreign derivative market dealers open entry into the Indian derivatives
market and permit them to introduce whichever contracts they wish to in order to meet
market demand providing that both dealers and contracts meet stringent quality tests (which
did not happen when MCX and NSEL were permitted to open).
D. Permit private companies, banks, insurance companies, etc. full unrestricted access to
open derivatives market operations to hedge their positions and provide essential market
liquidity as position-takers (i.e. options and futures contract underwriters) as long as they
meet proper quality and capitalization tests as entities of sound fnancial standing whose
margin positions and capital commitment are monitored in real time by SEBI.
E. Encourage the gradual progressive integration of Indian derivatives markets with derivatives
markets in other major fnancial centres, in particular Singapore, London and Chicago.
Case Study:
A. Study and learn from how derivatives markets have evolved in the US, UK, EU, Japan,
Canada and Australia from 1980 onwards. Apply the lessons learnt to India with appropriate
adaptation.
8. Restore macroeconomic balance: Commit to a reduced
fscal defcit of 3 percent of GDP in 36 months
A. Excessive government spending and borrowing distorts the Indian fnancial market.
B. More resources need to be freed up for use by the more effcient private sector.
C. It will enable Indian fnancial markets to be globally competitive.
A. It is politically tough to slash subsidies.
B. Every government wants to retain huge centrally-sponsored welfare programmes.
How to get it done:
A. Enact a new FRBM law; pledge to stick to it.
B. Announce a time bound phase out of non-merit subsidies in the frst Budget.
C. Widen tax base and lower rates to increase government revenues.
Case Studies:
A. Canada is one of the successful case among the G7, going from the second-largest net
debt-to-GDP ratio in the 1970s to the lowest one beginning in the late 1990s. The 90s plan
involved a major restructuring of spending, including reforms of unemployment insurance,
transfers to provinces, and pensions.
B. In New Zealand, farm subsidies were repealed in 1984. Almost 30 different production
subsidies and export incentives have been ended.
C. At present, London, New York and Singapore are the major global fnancial centres. Many
emerging IFCs around the world are aspiring to play a global role in the years to come: e.g.
Shanghai and Dubai.
9. Permit full convertibility of rupee on the capital account
A. It is the one step that will truly help integrate India with global fnancial markets.
B. It would help Mumbai become a major global fnancial centre, creating wealth and jobs.
C. It will be good for Indian business which is expanding overseas.
D. It would attract more inward investment.
E. It will beneft Indian residents who can vote with their money if the government is profigate.
F. It will discipline the governments fscal defcit.
A. If the macroeconomy is mismanaged, then it could precipitate a crisis.
B. Government will resist any measure than enforces fscal discipline on it.
How to get it done:
A. The internationalization of the rupee is an idea whose time has come. Mobilise public
opinion around it.
B. As long as there are strict commitments to rein in government spending, any potential
adverse effect can be minimized.
Case Studies:
A. Between197190 the Bretton Woods regime was replaced in all OECD economies by the
new stable regime based on foating exchange rates and open capital accounts.
B. The renminbi has been convertible on the current account since December 1996. The 1997
region-wide crisis thwarted Beijings endeavor of achieving full convertibility by the turn
of the century. Since then, Chinese technocrats have made a series of promises regarding
capital account liberalization. For instance, in January 2011 the State Administration of
Foreign Exchange announced that the currency would be fully convertible within fve years.
10. Implement recommendations of the Financial Sector
Legislative Reforms Commission which streamlines and
harmonises the legal framework for Indian fnancial markets
A. Most of Indias fnancial laws predate economic liberalization. These need to be amended.
B. The FSLRC has already done extensive research and provided a roadmap for a unifed
fnancial code.
C. The composition of the FSLRC was of experts and it is not politically partisan.
A. Radical reform will be resisted by various vested interests which beneft from the current
system of laws.
B. A new government may be tempted to reject the recommendations of the FSLRC because
it was set up by the previous government.
How to get it done:
A. In the frst Budget, announce a commitment to implement the recommendations of FSLRC;
that will end all uncertainty on its fate.
B. Lay out a roadmap of 36 months in which various recommendations of the FSLRC will be
implemented in stages.
Case Studies:
A. FSLRC has already looked in detail at how fnancial system regulatory reforms were carried
out in the US, UK, Canada, Australia and other countries in the periods of the 1990s and
after the 2008 crisis. The lessons learnt have been evaluated and understood. They need to
be applied.
B. For further study, the way fnancial reforms have been conceptualized and implemented
in China also needs learning from with appropriate adaptation to accommodate Indian
circumstances which are not as unique as many believe.
FOREIGN POLICY
1. Over 5 years, increase capital expenditure on defence
from 1.1 percent of GDP to 3 percent of GDP
A. Indias armed forces are woefully short of modern equipments.
B. Recent accidents in the Air Force and Navy prove that the need to upgrade equipment
is at an emergency stage. Hostile countries will not take Indias defences seriously until
the situation is rectifed.
C. Overall, India has a respectable defence spending fgure of 2.4 percent of GDP, but this
masks the fact that most spending is on salaries, establishment costs and other current
expenditures.
A. The Budget allocates defence spending under one head combining capital and current.
With One-Rank-One-Pension and the impending Pay Commission, there is a risk that
an increase in overall defence spending does nothing to increase capital expenditure.
B. Fiscal pressures over the next few years will mean that the government will have to cut
expenditure elsewhere to increase defence spending.
How to get it done:
A. Announce the intent to increase capital spending in defence in the frst budget. Outline
a roadmap.
B. Appoint an effective defence minister who is able to take quick decisions on acquisitions.
C. Allow private sector and FDI in defence so that costs of acquiring equipment come
down.
Case Studies:
A. According to SIPRI 2013 Yearbook, world military expenditure in 2012 was estimated
around $1756 billion, representing 2.5 per cent of global gross domestic product (GDP)
or $249 for each person in the world.
B. Military expenditure in Asia and Oceania rose by 3.3 per cent in 2012. Large increases
were seen in Vietnam, where tensions with China are prompting major naval purchases,
and in Indonesia. Spending in India decreased by 2.8 per cent.
C. China, the second largest spender in 2012, increased its expenditure by 7.8 per cent
($11.5 billion) in comparison to the preceding year in real terms. Russia, the third
largest spender, too increased its expenditure by 16 per cent ($12.3 billion) during the
same time period.
2. Expand Indian Foreign Service: allow lateral entry;
Encourage specialization in economic issues
A. Our diplomatic corps 930 IFS offcers - is small for a country of Indias size. Brazil
has 1200, China has 4000, Japan 5500 and the US has 20000. India has only marginally
more diplomats than tiny Singapore which has 867 (all 2013 statistics).
B. India has reasonably-sized missions in the neighbouring countries and the P-5 countries
but lacks suffcient representation in Africa, Latin America, and emerging East Asia
which contain some of the fastest growing economies in the world.
C. The IFS tends to be insular and immune to infuence from outside its cadre. Lateral
entry can bring fresh thinking.
D. The IFS has traditionally been geared to old-style political diplomacy. It needs to
have a new focus on economic issues.
A. The IFS will resist lateral entries.
B. There is a risk that instead of lateral entries, recruitment at entry level will go up.
How to get it done:
A. Aim to increase the size of the diplomatic corps by 50 percent to 1,400 personnel in
three years.
B. Do not permit additional recruitment at entry level. All additional personnel should be
drawn from the ranks of lateral entrants.
C. Change the mindset of the MEA; postings in economic divisions (including energy) or
to countries in Africa and East Asia should be considered prestige postings.
Case Study:
A. Brazil recruited 400 diplomats over a period of two years (2009-2010) to meet its rising
global aspirations.
3. Restructure the intelligence agencies: increase
coordination between agencies and make them accountable
to Parliament
A. In an era of asymmetric warfare, the role of intelligence is crucial.
B. Indias intelligence apparatus is fragmented; the IB reports to the Home Ministry, the
RAW and NIA to the PMO, and Military Intelligence to the Defence Ministry. State
intelligence agencies report to respective state governments. There needs to be a formal
coordination mechanism.
C. Intelligence agencies escape accountability under the garb of secrecy. That needs to
change.
A. Each agency will protect its own turf and will be reluctant to coordinate.
B. There will be a resistance to disclose information to Parliament.
How to get it done:
A. The National Security Advisor or the National Security Advisory Board could be the
one-point coordination agency for all other intelligence agencies. That would enable a
loop-in to the foreign policy establishment.
B. While all operational details need not be disclosed to Parliament, an account of spending
and an audit of performance by a Parliamentary Committee is essential.
Case Studies:
A. Australia has fve agencies focused on foreign intelligence. There are three collection
agencies (ASIS, DSD and DIGO), and two with an assessment role (ONA and DIO).
ASIO, Australia's security intelligence agency, incorporates collection and assessment,
as well as policy formulation and advice. The clarity of the role played by each agency
in the Australian intelligence community, along with the minimal duplication of
capability, is one of the strengths of the Australian system.
B. In the United States, the Parliamentary Oversight Body reviews all intelligence agencies,
approves top intelligence appointments. It checks both legality and effectiveness of the
services.
C. In South Africa, the Parliamentary Oversight Body purview includes legislation
activities, administration, fnancial management and expenditure of the services.
4. Act tough with Pakistan: revive covert operations ability;
Create economic deterrents; Ask Pakistan to reduce its
mission size in India
A. Pakistan will not stop sponsoring cross-border terror until India can signal its ability to
cause harm.
B. A full war is an impractical idea, not in Indias interests, but covert operations can be
used to damage Pakistan-based terror outfts.
C. Pakistans textile industry depends heavily on Indian cotton; India must leverage this
and other economic interests (including in energy) to put pressure on Pakistan.
D. Pakistans large offcial establishment in India is known to create mischief.
A. There will be a section of strong opinion which will favour a dovish approach to
Pakistan.
B. Indias own ability to launch covert operations is limited at the moment.
How to get it done:
A. Assign special units of the intelligence services and military to train for covert operations.
B. If Pakistan allows any terror attack from its soil, impose crippling economic sanctions.
C. Ask Pakistan to reduce its mission size to a bare minimum level, Head of Mission plus
two diplomats, down from Head of Mission plus 20 diplomats. India will not suffer if
asked to do the same in Islamabad.
Case Study:
A. The CIA covert program in Colombia provided for the battle against the 50-year-old
Revolutionary Armed Forces of Colombia (FARC) and a smaller insurgent group,
the National Liberation Army (ELN). The previously undisclosed CIA program was
authorized by President George W. Bush in the early 2000s and has continued under
President Obama, according to U.S. military, intelligence and diplomatic offcials. The
program is classifed.
5. Aggressively expose Sino-Pakistan nexus in international
forums like the UN and with countries like the US and UK
A. Pakistan draws its real strength from the tacit and explicit support of China.
B. India must expose this nexus and its role in giving seed to global terror; ironically,
Pakistan has been more successful in projecting its stand on Kashmir in international
forums over the decades.
A. India is hesitant about taking on China in international forums.
B. There are constituencies in the US and UK which explicitly support Pakistan and China
rather than India.
How to get it done:
A. Put this towards the top of the agenda in bilateral relationships with a range of countries.
B. Lobby important countries which have interests aligned with India, like Japan, to
support the cause.
Case Studies:
A. In September 2013, India's External Affair Minister Salman Khurshid expressed
concerns over strengthening China-Pakistan nuclear cooperation ahead of Indian
Prime Minister Manmohan Singhs scheduled visit to Beijing in October 2013. Indian
leadership also raised the issue during Chinese Premier Li Keqiangs visit to India in
May, 2013.
B. In January 2014, India and Japan decided to "further consolidate and strengthen their
strategic and global partnership" in the defence arena through measures ranging from
regular joint combat exercises and military exchanges to cooperation in anti-piracy,
maritime security and counter-terrorism.
C. India is already responding by strengthening its strategic links with Afghanistan,
Tajikistan, Mongolia, Vietnam, and Burmacountries on Chinas periphery.

6. Bring Tibet into bilateral dialogue with China; Ask for
Tibets historical independence
A. Tibet and Xinjiang are Chinas weak spots internally. India must exploit these.
B. It will send a signal that India will raise issues that China might see as its internal
affairs as long as China meddles in India either via Pakistan or through direct incursions.
A. India has already conceded too much ground on Tibet to China.
How to get it done:
A. Use Tibet as a bargaining chip in border negotiations with China.
Case Study:
A. In 2009, China vetoed a development plan for India by the latter in Arunachal Pradesh
and internationalized a bilateral territorial dispute. In response, New Delhi has kept
Beijing out of India-led multilateral frameworks such as the India-Brazil-South Africa
Dialogue, and the MekongGanga Cooperation forums, and declined Chinas request
to be incorporated as observer or associate member into the 33-member Indian Ocean
Naval Symposium, started by India in2008.
B. Invest heavily in roads along the China-India border
7. Invest heavily in roads along the China-India border
A. Lack of infrastructure in border areas means that India is under-prepared for even low-
intensity confict, including temporary incursions.
B. China has frst rate infrastructure on its side of the border.
C. Apart from serving a military purpose, better roads on the mountainous border terrain
will boost local economic activity, particularly tourism.
A. It will involve a huge cost.
B. The terrain is diffcult.
How to get it done:
A. End the monopoly of the Border Roads Organisation.
B. Allow competitive bidding of road projects.
C. Devolve fnances to the concerned state governments to construct roads on a war
footing.
Case Study:
A. Since the September 11 attacks, both Canada and the United States have invested
heavily in border security. The two countries have worked together on trade facilitation,
trusted-traveler programs, and border infrastructure projects that support border security
while facilitating legitimate trade and travel.
8. Sign defence pacts with Chinas East Asian rivals;
Begin with Vietnam
A. There is deep concern about Chinas growing military muscle in the East Asia region.
B. Given Indias fscal constraints, it is unlikely to be able to match Chinas defence
spending in the near future. Alliances are the only way to form a credible deterrent.
A. China will view such defence pacts as a threat and try and stall them.
B. India will have to overcome its superpower pretensions and ally on equal terms with
smaller countries.
How to get it done:
A. Vietnam, like India, has border disputes with China. India can forge common interests
with it.
B. Japan is also weary of Chinas military intentions. India can forge a closer defence
alliance with Japan.
Case Studies:
A. In 2013, India offered a $ 100-million credit line to Vietnam to purchase military
equipment including four patrol boats. The two countries have long enjoyed strategic
ties that include cooperation in the civil nuclear sector, training slots for Vietnamese
military offcers and frequent exchange of visits.
B. In 2013, India and Singapore reaffrmed their strong and long-standing defence ties as
they renewed a bilateral agreement for the conduct of joint army training and exercises
for another fve years.
9. Regain lost infuence in Indias neighbourhood; Adopt a
carrot and stick approach
A. India has lost infuence in recent years with traditionally friendly countries like Nepal,
Bangladesh, Sri Lanka and Maldives.
B. China has been pumping large sums of money into these countries, largely through
government agencies. India needs to step in by leveraging the strength of its private
sector.
A. Some neighbouring country governments are openly hostile to India.
B. The Government of India cannot match the Chinese Governments spending power.
C. The use of sticks to bring errant neighbours in line requires strong, decisive
leadership.
How to get it done:
A. Incentivise the private sector to invest in neighbouring countries. Use diplomacy
more aggressively to further Indias private sector interests.
B. In instances like Maldives where Indian interests are being openly defed, India needs
to display a show of strength; India could have sent troops or organized Air Force
sorties over the capital (visible sticks).
C. In some cases like Bangladesh, the central government needs to co-opt the support of
the concerned state government (like West Bengal) to meet foreign policy objectives
in the neighbouhood
Case Study:
A. South African frms conducted about 70% of intra-regional investment fows, and
South Africa accounted for 71.5% of the regions GDP in 2009. South Africa is also
the largest food exporter within the region. Investment from South Africas private
sector to neighboring countries is the key to economic growth to the region.
10. Revitalise the Indo- US relationship: forge common
interests on Af-Pak region, Iran and on bilateral economic issues
A. After the high of the nuclear deal in 2008, Indo-US relations have stagnated. After
the recent diplomatic fracas over an Indian Deputy Consul General in New York, the
relationship may have deteriorated. There is plenty of scope for revival.
B. India and the US, both democracies and free market economies, have naturally aligned
interests.
C. On Af-Pak and Iran, there is huge scope for forging common interests.
A. The relationship has been ignored for some time.
B. Some of the sticky bilateral economic issues are diffcult to resolve.
How to get it done:
A. India should pitch for an active role in Afghanistan post the US troop withdrawal at
the end of 2014. This need not be a military role.
B. India could act as an informal mediator between the Iran and the US as those two
countries attempt a rebuilding of ties severed since 1979.
C. The idea of a free trade pact or a bilateral investment treaty with the US must be
pursued provided Indias interests, particularly on labour mobility, but also on non-
tariff barriers on agricultural goods, are addressed.
Case Studies:
A. India has played an important and constructive role in the post-Taliban regime. The
Indo-Afghan trade too swelled fast, and of late, Indian investment has started fnding
its way into the country. India also provided economic assistance in form of outright
grant nullifying any burden of repayment.
B. In March 2014, business delegation from the United States has pledged to invest $250
million in India over the next 6 to 12 months, a move anticipated to boost Indo-US
trade ties.
HEALTH
1. Double Government Expenditure on Health from just under
2 percent of GDP to 4 percent of GDP in fve years:
Use additional funds innovatively
A. Indias Government spending on the health sector is well below world average. It is also
below the average level of most emerging economies.
B. The Health sector faces a resource crunch. Given Indias population numbers and per capita
income, private sector alone cannot meet the demand.
A. The additional funding may be sunk into non-performing Government schemes and non-
performing Government hospitals.
B. From a political economy point of view, putting money into heath is always less attractive
than giving freebie subsidies.
How to get it done:
A. Explore Public Private Partnership options beyond giving government land to private
hospitals. A combination of Government fnancing and private delivery could work for
India.
B. Rationalise existing Government schemes in health. Try and consolidate into one or two
(urban/rural) schemes.
C. Consider a National Health Insurance scheme where the genuinely needy will be subsidised
by the Government.
Case Studies:
A. Many developing countries like Malaysia, Indonesia and Cuba provide virtually free,
quality healthcare to their people
B. Hong Kong's universal health care system involves heavy government partaking despite
being considered as the freest economy. Public hospitals account for 90 percent of in-
patient procedures, while the private options are used mostly by the wealthy.
2. Create an incentive system for transfer of health-linked
funds to states
A. Health is a state subject but states need funds from the Centre.
B. By offering more funds to states which show better improvements on various health
parameters, there will be a healthy competition between states; standards will improve.
A. Some states will resist on the ground of equity.
B. There is a danger that the ruling party at the Centre could use this to discriminate against
states which are run by opposition parties.
How to get it done:
A. Constitute a committee to evolve a transparent criteria and formula for transfer of funds.
B. To reduce resistance from laggard states, link the transfer of funds to delta improvements
under different parameters. The starting point should be less important.
C. The Finance Commission could be asked to explore the mechanics of such a transfer of
funds.
D. Reach out to regional parties to evolve a consensus.
Case Studies:
A. The Canadian constitution makes health a provincial responsibility, but, regardless of
provincial variations, the federal government's sizeable share in fnancing means that all
Canadians get similar free access to doctors and to a nationally determined range of hospital
services, regardless of their province.
B. Finland and Sweden combine old traditions of health policy implementation by several
elected local governments with strong national standard setting and redistributive spending
by the central state. In principle Swedens decentralised system permits local government
to tailor reforms that handle the delicate balance between effciency, equity, and political
accountability.
3. Train a new category of para-doctors: college graduates with
two years medical training who can treat basic diseases
A. Indias over-burdened doctors will be relieved by the development of a new paramedical
specialty.
B. Most common diseases can be treated by para doctors. They do not need super-specialty.
C. Training and strengthening primary and secondary health care providers in managing
common problems will allow tertiary care centres to focus on more complicated diseases.
D. It is a good way to bring quacks into the mainstream by offering them two year training.
A. For now, medical education is mostly based in a tertiary care setting and is provided at
academic medical colleges.
B. A new curriculum will need to be developed and appropriately qualifed teachers will need
to be found.
C. It will therefore entail a cost.

How to get it done:
A. Use non-medical institutions of higher education to introduce the para-doctors course.
B. Ensure devolution of responsibility for health care to district management systems along
with accountability mechanisms and explicit community participation.
C. Encourage para-doctors by offering good salaries and other incentives to branch out into
rural areas.
Case studies:
A. The University of California Riverside School Of Medicine, which enrolled its frst 50
students last year, will train physicians who will remain in the community, where there is
a shortage of doctors.
B. Central Michigan University College of Medicine, is relying on fnancial incentives to help
it address the physician shortage. 80% of the students in its inaugural class of 64 last year
grew up in remote and rural areas of Michigan, and much of the training takes place in the
community.
C. Among the Indian states, Kerala has the best coverage of medical care facilities in the rural
sector. Even the remotest places and tribal hamlets have access to basic medical facilities,
which makes the state different. In Kerala, the doctor-patient ratio of 1:700 is on par with
most of the European countries.
4. Commitment to build an AIIMS-like super specialty teaching
hospital in every state
A. It will augment facilities for quality medical education & specialist healthcare facilities in
the country.
B. It will help correct regional imbalances in the availability of affordable and reliable tertiary
healthcare services.
C. It will have positive spillover effects for other medical colleges and hospitals in states
which can affliate to a top quality institution.
A. Mushrooming private health care systems with vested interest will try to undermine the
efforts.
B. Tackling the non-fnancial obstacles in service delivery (e.g. logistics, HR, and governance
issues) may be cumbersome.
How to get it done:
A. Increase budget allocation for healthcare facilities including setting up of more AIIMS- like
institutes and tertiary care hospitals (specialty or super specialty) in the states to facilitate
Right to Health, Right to have free quality health care to all.
B. The Union Health Ministry must upgrade existing government medical colleges, with the
aim of providing adequate service and resource people to deliver health care.
C. Facilitate greater autonomy and faster execution of the projects and also expedite release
of funds from the government.
D. Promote usage of public health facilities not only for emergency and referral purposes, but
for other types of cases.
Case studies:
A. Six All-India Institutes of Medical Sciences-like institutes approved under the Pradhan
MantriSwasthyaSurakshaYojna (PMSSY) are already coming up in different states.
B. The French system is one of universal health care largely fnanced by government national
health insurance. Around 77 percent of health-care costs are covered by the state.
5. Restructure Union Health Ministry: create a separate
department manned by experts to focus on TB, Malaria and
HIV the three biggest killer diseases in India
A. Health Ministry is spread too wide. A separate department focused on tackling just three
diseases will lead to more effective policy action.
B. It is the best way to laterally induct doctors and public health offcials into policy making.
C. A. It will be resisted by the IAS and other career bureaucrats.
How to get it done:
A. Use the role model of the National AIDS Control Organisation (an autonomous body
under the Health Ministry) which has been reasonably successful in advocacy on AIDS
prevention.
B. The new department head can be at the level of Additional Secretary, who will report to
the Health Secretary but will have considerable autonomy in functioning. That will reduce
IAS resistance.
C. Ensure that the selection process for positions in the new department is transparent and
attracts the best talent whether from government hospitals, private hospitals or NGOs.
Case Studies:
A. The 20th century saw the eradication of malaria in the US, southern Europe and several
Asian countries following multi-pronged efforts to reduce vector breeding and parasite
transmission.
B. Deaths from HIV have been brought down to negligible levels in the West. India has done
a reasonable job in tackling HIV, but not TB and malaria.
6. Restructure Government hospitals: contract out all non-core
services (cleaning, security, canteens etc); in particularly
dysfunctional hospitals outsource entire management on a
non-for-proft basis
A. Too many Government hospitals are run like large unwieldy Public Sector Corporations.
B. Hospital administrators should spend all their time on medical issues. There are plenty of
frms in India which can manage the other non-core services.
C. In the medium term, it will reduce costs as employees on the rolls of hospitals come
down. The freed up resources can be spent on doctors, nurses and equipment.
D. Even dysfunctional hospitals have basic infrastructure like buildings and medical
equipment. These can be leveraged in the hands of better management.
E. It will take time to build new hospitals. In the interim, given the wide gap between
demand and supply, this is one way to quickly inject some quality supply in the existing
system.
A. There will be opposition from employees unions.
B. Hospital administrators will resist the loss of power and patronage.
C. It will be resisted by incumbent management and other vested interests.
D. It will be alleged that Government is giving out public assets to private sector.
How to get it done:
A. Relocate non-essential employees to other institutions.
B. Offer a generous VRS to non-core employees.
C. Outsourcing should be done via transparent bidding process.
D. Emphasise that the government is not relinquishing ownership, only outsourcing
management
Case Studies:
A. Wockhardt Hospital in Mumbai outsourced its payroll activity to Mafoi, a leader in handling
HR solutions. Care Hospital, Hyderabad had also outsourced its payroll activity as a pilot
initiative. Mumbai's Dr LH Hiranandani Hospital had a tie-up with the University of Sydney
in Australia to train its nursing staff. Mumbais Jaslok Hospital too outsourced non-clinical
services for cost reduction of in-house services for laundry, kitchen and housekeeping.
7. The Medical Council of India should have a 24 hour help line
for receiving complaints which must be uploaded on the
web immediately
A. It will create a centralized knowledge generation and information contact point with respect
to healthcare best practices and registration of hitherto neglected complaints of malpractice.
B. It will improve information infows and lower the costs of information exchange.
C. Poor quality and ineffcient delivery of public and private services would be addressed with
improved accountability mechanisms.
A. Vested interests in the public sector and private sector who are not used to accountability
will resist.
B. Need to build a technical backbone.
How to get it done:
A. Direct the Medical Council to set up the helpline and online database within 3 months.
B. Launch a massive awareness campaign on the helpline number.
C. Set up a wing in the Union Health Ministry which will monitor and respond to complaints
within a given timeframe.
Case study:
A. The Maharashtra Medical Council (MMC) decided in 2011 to introduce an online complaint
platform to help medical negligence victims ensure quick resolution of their issues.
B. Complaint about UKs NHS can be made either verbally or in writing/email to the service
provider such as GP, dentist, hospital or pharmacist. The National Health Service Litigation
Authority (NHSLA) in the UK is a special health authority responsible for handling both
clinical and non-clinical negligence cases on behalf of the NHS and brings out a fact sheet
each year outlining details of claims cases.
8. Set up designated consumer courts which deal only with cases
of medical negligence and spurious drugs
A. India has laws against medical negligence but a painfully slow judicial process has rendered
them ineffective.
B. It will help lift the standard of healthcare in both public and private sector.
C. It will eliminate fy-by-night manufacturers of poor quality drugs.
A. It will entail a cost in terms of setting up new courts and hiring more judges.
B. It may raise insurance premiums for practicing doctors; they may resist.
How to get it done:
A. Begin immediately by designating some existing consumer courts exclusively for health
and medical issues.
B. Set up special tribunals (independent from judiciary) manned by experts in public health
which can hear cases of negligence and spurious drugs and impose penalties on wrongdoers.
Case Studies:
A. In China, the health system established a regulatory outline to ensure an elementary level
of quality service by village level doctors. Most Chinese provinces have created a licensing
system whereby village doctors are required to take annual examinations. Local health
departments also carry out periodic campaigns to crack down on clinics run by unlicensed
personnel. But, these supervisory practices are often limited by lack of resources.
B. The South African National Consumer Protection Act (CPA) came into effect on 1 April
2011 aiming at promoting fair, open and good business practice between the suppliers and
consumers of goods or services including healthcare services.
9. Creation of independent Technology Assessment Boards for
rational deployment, and use, of drugs and technology
A. The indiscriminate use of antibiotics is creating drug-resistant bacteria which could pose
a serious health crisis in India. A dedicated technical body is needed to address this crisis.
B. In the diagnostics sector, there is virtually no regulation of the technology used. A regulator
needs to certify all diagnostic labs so that poor standard of equipment is not used.
A. There is a risk that such a body could create a new licence raj.
B. It will be resisted by drug-sellers and several labs which beneft from the under-regulated
system.
How to get it done:
A. Set the body up at an arms-length from the Ministry of Health. It should be manned by
technical experts only.
B. The Board must have subsidiary bodies in states. One board at the Centre will be insuffcient
to handle the load.
C. One of the mandates of the Board should be to create public awareness on these issues
through outreach initiatives.
Case Study:
A. The Telemedicine Consultation Centre (TCC) at a socio-economically backward district
of Mehaboobnagar in Andhra Pradesh deserves a special mention. The autonomy enjoyed
by the Mehaboobnagar district hospital under a World Bank assisted project facilitated the
state health authorities to enter into a public-private partnership to better the delivery of
health services through a TCC.
B. In the UK, Health Technology Assessment broadly focuses on Clinical effectiveness and
Cost-effectiveness. HTA has long been a policy priority in the UK. Since 1993, and the
establishment of the National Coordinating Centre for Health Technology Assessment, the
UK has had a highly active HTA research programme of international reputation. Over the
last decade, three key policy-making users of HTA have emerged in England, Scotland
and Wales.
C. The European Medicines Agency is a decentralised agency of the European Union, and
is responsible for the scientifc evaluation of medicines developed by pharmaceutical
companies for use in the European Union.
10.Announce a Central Government programme to construct
public toilets on a war footing
A. Low-cost and public toilet system has improved sanitation for millions and freed countless
scavengers from a life of cleaning human waste.
B. It will prevent mortality of a million children who die each year from water and sanitation-
related diseases such as diarrhea, cholera and hepatitis.
C. Reducing the toll of communicable diseases will raise labour force productivity and life
expectancy.
A. It will entail a cost
B. There will be rivalry between Centre and State on who should get the credit
How to get it done:
A. Use a Centrally-funded programme but implemented largely by the states (preferably
districts)
B. Aim to have at least one public toilet per 500 people
C. Set strict time deadlines for completion
Case Study:
A. Sulabh International Social Service Organisation founded by Bindeshwar Pathak in 1970
spurred a 'toilet revolution' in India. It tackled the problem of sanitation related pollution
leading to environmental degradation and health hazards. Sulabh International has planned
to build toilets in 50 countries in Asia, Africa and Latin America.
INFRASTRUCTURE
1. Create a National Infrastructure Board (NIB) chaired by the
Prime Minister and co-chaired by the relevant Chief Minister
A. It will become a single window clearance for big-ticket infrastructure projects.
B. It will ensure coordination between the central and state governments, both of whom have
multiple powers of clearances.
C. It will inspire confdence among investors that project clearances are being made by the
executive heads of the government of India and state government.
A. It can be criticized for over-centralization of authority.
B. There may be resistance from some ministries in the centre and state which may fear loss
of turf.
How to get it done:
A. Union Environment Minister must be a member of the NIB.
B. Give the NIB access to government land banks to overcome diffculties posed by Land
Acquisition Law.
C. Persuade state governments to join the Board; begin with CMs from the ruling party/
coalition.
Case Study:
A. In New Zealand, the National Infrastructure Advisory Board consisting of members from
the private sector and outside central government was established to advise the National
Infrastructure Unit and the Minister for Infrastructure on project appraisal, capital asset
management issues and the development of the National Infrastructure Plan. A key role for
the board is to engage with the private sector, local government and other stakeholders.
2. Separate policymaking and regulation; Set up independent
sectoral regulators to monitor user fees and tariffs
A. There is a confict of interest in the same body doing policy formulation and regulation.
B. Tariffs and user charges should be insulated from the compulsions of politics.
C. Separation has worked well in some infrastructure sectors like telecom.
A. Ministries will hesitate to surrender turf.
B. There is a danger than independent regulators will come from the ranks of ministry offcials
causing confict of interest.
How to get it done:
A. Set up independent regulators for Railways, Roads, Airports and Ports or a unifed regulator
for transport.
B. Ensure that appointments to regulatory bodies are based on expertise; avoid confict of
interest.
Case Study:
A. In the UK, the Utilities Act 2000 brought the regulatory tasks and goals of different
regulators under a single statute which streamlines the appointment and dismissal of
regulators, their accountability to Parliament and the regulatory practices they adopt. UK
is also the frst country to set up independent railway safety regulator. The Offce of Rail
Regulation (ORR) regulates Network Rail's activities and funding requirements, regulates
access to the railway network, licenses the operators of railway assets and publishes rail
statistics.
3. Merge the ministries of Roads and Highways, Railways, Civil
Aviation and Shipping into an integrated ministry of transport
A. It will enable the government to present a comprehensive, integrated transport policy.
B. It is in line with the global best practices of having a unifed ministry of transport.
A. It will mean that the job of 4 cabinet ministers will be reduced to one.
B. It will be resisted by politicians and the bureaucracy, particularly the Railways bureaucracy.
How to get it done:
A. Announce the new ministry at the time of the swearing-in of the council of ministers.
B. Appoint ministers of state to the individual departments within the ministry.
Case Study:
A. Singapores Ministry of transport administers and regulates land, sea and air transportation
within the republics jurisdiction. The main focus of the ministry is to bring about effcient
and cost effective transportation to enhance Singapore's economic competitiveness and
quality of life.
4. Permit renegotiation/re-auctioning of PPP contracts
A. Most infrastructure projects have a long gestation period. Global experience shows that if
underlying conditions change, then PPPs must be renegotiated.
B. Some PPP projects may fail to function properly because of incompetence or graft. There
should, therefore, be a provision to re-auction these rather than keep them stalled for long
periods.
C. Despite problems, PPP is the only viable way to build Indias massive infrastructure needs.
A. There is the threat of litigation, which could take long in Indias slow justice system.
B. There may be allegations of favouritism or excessive concessions to the private partner in
the PPP.
How to get it done:
A. Amend all PPP guidelines to include provisions for renegotiation/re-auctioning.
B. Reignite public faith in PPP by conducting transparent re-auctioning of existing stalled
projects.
Case Studies:
A. Many PPP projects have lent themselves open for renegotiation in India. For instance,
GMR and GVK have walked out of mega-highway projects. Delhi Airport has clamoured
for resets. There are also problems brewing in the Gurgaon Expressway project. Tata Power
and Reliance Power are struggling to transform their mega power projects powered by
imported coal into proft-making ventures due to changes in input costs.
B. Chilean PPPs were launched in 1993 with the ElMeln tunnel concession. There had been
148 renegotiations of PPP contracts by 2007, and therefore each concession had been
renegotiated three times on an average which led to an increase of $2.8 billion, or nearly
one-third, in total investment, from $8.5 billion to $11.3 billion.
C. Peru has experienced modest renegotiation of concession contracts compared to other
Latin American countries, partly due to its well-conceived concession, regulatory and
institutional designs.
5. Enable easier fnance for infrastructure: facilitate the
development of a long term bond market, allow foreign pensions
funds and private equity funds by amending qualifcations for
investment in physical infrastructure
A. Given the rising NPAs in the banking system, banks are unlikely to be able to fund suffcient
infrastructure projects.
B. Bonds are the preferred method of fnancing of infrastructure globally.
C. Foreign pensions funds and private equity will bring much needed resources.
A. It will have to be incorporated into the wider and more controversial gambit of fnancial
sector reform.
How to get it done:
A. Implement the recommendations of the Financial Sector Legislative Reforms Committee.
Case Studies:
A. China has experienced more than 25 years of extraordinary economic growth due to
decentralized fscal system, in which provinces and large cities are given the freedom to
make infrastructure investments to stimulate local development. They are allowed to retain
a large part of the fscal revenues that are generated from economic activity.
B. Governments with cash to spare, like China and parts of the Middle East, often prefer to
fnance infrastructure projects directly, allowing them to maintain control.
C. Australia and Canada developed and implemented modest national infrastructure plans
using well-thought-out PPP procurement approaches to help fnance projects. Aging
highway systems and urban congestion pose ongoing challenges, but both countries make
progress in addressing their substantial needs, buoyed by relative fscal calm.
D. International investors from the U.S., Europe, Asia and Australia have focked to the Chilean
market to develop both fossil fuel-fred and renewable energy projects.
E. In Latin America and the Caribbean, commercial lending institutions are actively looking
for lending opportunities to well-structured infrastructure projects throughout the region.
Multilateral lending institutions, such as the International Finance Corp. (IFC) help critical
infrastructure projects fnd funding by introducing creative fnancing structures, which all
also attract interest from the private lending community.
6. Restructure NHAI to convert it into Mission Mode; Upgrade
Golden Quadrilateral from 6 lanes to 12 lanes
A. Autonomy from the Ministry of Roads and Highways will increase the effciency of NHAI.
B. Experience shows that when government works in mission mode it delivers better outcomes.
C. At 4-6 lanes Golden Quadrilateral is inadequate for Indias growing traffc requirements.
D. A high-speed 12 lane network will have huge positive spill-offs by reducing transactions
costs of transport.
A. The ministry/department of roads will be unwilling to surrender control over NHAI.
B. Land acquisition issues will be a big hurdle to expanding highways.
How to get it done:
A. Give full functional autonomy to NHAI.
B. Appoint a professional from outside Government to head NHAI.
C. Implement recommendations which allow renegotiation, re-auctioning of PPPs.
Case Studies:
A. In Australia, Dual-carriage highways linking Brisbane, Sydney, and Melbourne are being
built.
B. Trillions of dollars worth of infrastructure investment has transformed China into an
exemplar of modern urban transit, expansive highways, vanguard high-speed intercity rail,
and highly effcient ocean ports. The longest high- speed rail route in the worldcovering
1,200 miles in an eight-hour rideopened between Beijing and Guangzhou in 2012.
7. Corporatise Indian Railways; Abolish the Railway Board;
Allow private operators to run trains, stations
A. In its present monolith form with over 1 million employees, it is diffcult to make the
Railways effcient.
B. Breaking it into regional corporate units and subjecting them to competition with one
another will improve services.
C. Private competition will bring better services while maintaining reasonable prices.
A. The bureaucracy of the Railway Board in Delhis Rail Bhavan will resist.
B. If Railways remains a separate ministry, then the minister may not allow corporatization.
How to get it done:
A. Abolish the Railway Board. Set up seven or eight regional units as corporate entities each
headed by a CEO.
B. Some or all of these entities could be listed on the stock market as the government begins
to divest shares.
C. Allow competition between the different regional units in providing inter-regional services.
D. An independent regulator would be needed to monitor tariffs and ensure that competitive
practices are being adhered to.
Case Studies:
A. British rail has evolved into a privately run public transport system playing a critical and
successful role in the economy with passenger numbers booming, productivity rising and
the number of services soaring.
B. New Zealand corporatised the railway in 1982 and privatised it as an integrated business in
1993, but in September 2004 the infrastructure was taken back into state ownership.
C. In Australia, the Interstate network between the NSW border and Acacia Ridge Intermodal
Freight Terminal is leased to the Australian Rail Track Corporation. Heavy freight haul
and the Central Queensland Coal Network are leased by Aurizon (formerly QR National), a
privately owned corporation. Passenger rail services and the urban rail network are owned
and operated the Queensland Government-owned Queensland Rail.
8. Build a high-speed Rail Network; begin with routes plied by
the Shatabdi Express trains
A. It will enable faster travel and bring greater convenience to travelers.
B. It will boost the growth of Tier 2 and Tier 3 towns which are within a 250 km radius of big
cities by cutting town travel time signifcantly.
A. It will entail a high cost.
B. It will be a challenge to deliver cost effective services to consumers.
How to get it done:
A. Start with a pilot project, possibly Mumbai-Ahmedabad.
B. Expand it to routes currently plied by the Shatabdi Express trains.
C. Raise fnance through the bond market.
Case Studies:
A. Britain is developing HS2 to provide railways with new capacity, better connectivity and
quicker journeys. HS2 will link 8 of Britains 10 largest cities, serving 1 in 5 of the UK
population. It will allow more passengers to use trains and more freight operators to use
rail rather than road.
B. China has announced doubling of its high-speed rail network by spending 60bn this
year. The investment forms part of a project which represents the largest and fastest rail
expansion programme in the world.
9. Build 50 new airports in big cities, Tier 2 and Tier 3
cities/towns; Abolish aviation fuel tax
A. Air travel is still concentrated in the metros and larger cities.
B. Better airport infrastructure in smaller towns will enable connectivity.
C. Allow multiple airports (at least two) in big cities like Delhi and Mumbai so that competition
goes up and costs (for passengers and airlines) go down.
D. High aviation fuel tax has made the Indian airline industry uncompetitive by global
standards.
A. Airports Authority of India may resist PPPs necessary to expand airport infrastructure
rapidly.
B. Incumbent operators will resist a second airport in the same city.
C. States make revenue out of ATF (Aviation Turbine Fuel), so will be reluctant to abolish it.
How to get it done:
A. Encourage private investment, independent of AAI (Airports Authority of India), in building
modern greenfeld airports in smaller cities and towns.
B. Give existing operators in big cities the right to frst refusal for second airport.
C. Abolish ATF as part of a grand deal on GST (Goods and Services Tax). Only the new GST
rate will apply to ATF. Compensation to states for any revenue loss from abolition of ATF
should be built into the GST grand deal.
Case Study:
A. In 2012, China announced building of 70 new airports in three years. In all, the current
Five Year Plan calls for 55 new civil airports by 2015, bringing Chinas total to 230.
10. Privatize major public sector ports
A. The largest ports are still publicly-owned and are ineffcient by global standards.
B. Indias most effcient port-Mundra- is privately owned.
C. There is no economic logic for major ports to be in the public sector.
A. There will be resistance from vested interests.
B. Labour unions will also resist.
How to get it done:
A. Identify 2 ports which can be fast-tracked for privatization in 12 months.
B. Offer generous VRS to employees.
C. In some cases, move to public-private partnerships
Case Studies:
A. In June 2013 the Government of New South Wales in Australia announced that it would
sell the Port of Newcastle to fund signifcant infrastructure projects.
B. Major ports in Malaysia, Thailand and the Philippines cannot be considered purely public
ports after allowing private sector participation in their ownership and operation.
INVESTMENT
1. A commitment to reduce the fscal defcit and revenue defcit
by 0.5 percent per year
A. The high fscal defcit is crowding out the more productive private sector from fnancial
resources.
B. A commitment on lower defcits would enable a looser monetary policy that would boost
investment.
A. A sluggish growth rate means that it will be hard to raise revenues without the damaging
prospect of raising taxes.
B. There is a risk that productive capital expenditure may be cut and not unproductive subsidies
and government consumption expenditure.
How to get it done:
A. Introduce a new Fiscal Responsibility and Budget Management Act with the frst Budget.
B. Target non-merit subsidies, particularly in petroleum and fertilizers; institute a 36-month
reduction plan, @ 1-3% per month, to reach the optimum/permanent subsidy level.
Case Studies:
A. Canada is one of the successful case among the G7, going from the second-largest net
debt-to-GDP ratio in the 1970s to the lowest one beginning in the late 1990s. The 90s plan
involved a major restructuring of spending, including reforms of unemployment insurance,
transfers to provinces, and pensions.
B. In India, the fscal defcit for 2012-13 was lower at 4.89 per cent of the GDP, considerably
below the revised estimate of 5.2 per cent, due to larger than estimated mop-up by way of
taxes coupled with higher non-tax collection.
2. Implement the Goods and Services Tax immediately
A. It is estimated that the implementation of GST could add 1-1.5 percentage points to GDP
growth per annum.
B. A unifed single market in a big country is a big boost to economic activity.
A. Some states will resist implementation because of fears of revenue loss.
B. There is a danger of setting the rate too high which will deter investment and revenue
collections.
How to get it done:
A. Offer a grand bargain in which the Center will over compensate any state that fears a loss in
revenue, i.e. instead of waiting to get it right in one go, start immediately with an interim/
evolving formula, offer liberal revenue protection/make-up plans to states as per a sliding/
benchmarked plan that can be periodically reviewed/re-benchmarked in the light of real
data.
B. Set a reasonable rate, ideally 12% (Center and states combined).
Case Study:
A. France was among the frst countries to enact a common goods and services tax. Over 140
countries in the world have GST.
3. Issue a Pledge: In low and stable taxation and rule of
law we believe
A. Certainty and stability in tax regime is crucial for both domestic and foreign investors.
B. After the Vodafone/Shell/Nokia cases, it is important to assure investors that there will be no
retrospective changing of laws, or opaque guidelines which can be arbitrarily interpreted,
either on taxation or other rules of business.
A. A high fscal defcit may tempt a Government to be extractive on taxation.
B. Populist politics fnds it attractive to penalize foreign companies.
How to get it done:
A. Implement an uncompromised Direct Taxes Code which lowers rates of taxation while
ending exemptions; ensure that the fne print is clear/unambiguous and thoroughly vetted
by credible experts.
B. Issue a pledge not to raise tax rates in the frst Budget.
Case Studies:
A. Low Taxes and stable money are best exemplifed by Hong Kong and Singapore. Both
have modest tax rates. Prudent macroeconomic policy within a stable political and legal
environment has been the key to Singapores continuing success in maintaining one of the
worlds highest levels of economic freedom.
B. Decisive tax reforms in Sweden have made the corporate tax rate competitively low and
have enhanced private-sector productivity. Swedens economic resilience has long been
sustained by solid foundations of economic freedom. The rule of law is well maintained.
Property rights and contract enforcements are very secure and expropriation is highly
unusual.
4. Privatise PSUs, Increase Public Investment with the proceeds
A. There are many PSUs which are clearly non-strategic and therefore should be low hanging
fruit (e.g. the Telecom PSUs, Air India, ITDC).
B. Public sector investment as share of GDP was 9.4 percent in 2008-09. It had declined to
7.91 percent in 2011-12. Rebooting public investment is key to reviving growth.
A. There is a danger of disinvestment replacing privatization. Minority stake sales are not
enough. Privatise non-strategic PSUs entirely.
B. There will be resistance from employees unions in PSUs.
C. The proceeds from privatisation may end up being used to fnance Government consumption
expenditure.
How to get it done:
A. Opt for a big bang approach rather than incremental approach; tackle the resistance in one
go.
B. Offer generous VRS schemes to employees of bloated PSUs before privatisation; also offer
a grand-fathering/government-transfer/reskilling plan to those employees who are most
opposed to privatisation, in such a way that they remain unaffected, and their costs are
written off to the proceeds from privatisation. This may perhaps be the only way to
neutralize large-scale opposition to a big bang plan.
C. Issue a commitment to use sales proceeds only for investment, not consumption.
Case Studies:
A. Chiles main telephone company doubled its capacity in the four years after the Government
privatized it. In New Zealand and Japan, state -owned enterprise reforms began to bite only
when done in conjunction with privatisation.
B. Chicago's $1.8 billion lease of its Chicago Skyway toll road, $1.15 billion lease of its
downtown parking meter system, and $560 million lease of four downtown parking garages
are examples of the franchise approach of privatisation.
C. Centennial, Colorado privatised all of its public works functions in 2008. Bonita Springs,
Florida privatised all of its community development services (planning, zoning, permitting,
inspections and code enforcement) in 2008, and Pembroke Pines, Florida privatised its
entire building and planning department in June 2009.
5. Remove FDI caps across the board; in select strategic sectors
like defence, allow 24 percent domestic equity
A. The volatile Balance of Payments scenario and unstable FII fows are a good reason to
encourage more stable FDI fows.
B. Foreign investors have lost confdence in the India story. Abolishing FDI caps across the
board will re-establish confdence.
A. In the midst of a slowdown, there will be resistance from domestic industry which will
clamour for protection rather than liberalization.
How to get it done:
A. Identify a handful of strategic sector like defence where there can be a FDI cap of 76 percent.
Simultaneously, ensure that India-registered but foreign-owned entities are effectively
brought under the gaze of Indian laws, so that overseas ownership cannot be misused.
B. Scrap case-by-case approvals. Move everything to automatic route. All documents that
are currently required to be submitted to FIPB to make a case for the approval should be
mandatorily listed on the companies website under an automatic approval regime.
C. Scrap local content requirements which have been deterrents in sectors like retail.
D. Remove FII stakes in listed companies (that are widely held and traded on Indian/global
exchanges) from the defnition of FDI i.e. FDI should only include direct foreign investments
of a strategic nature which are held/operated under a strategic shareholding agreement.
Case Studies:
A. Four of the top fve recipients of foreign funds have been listed as developing economies
by the United Nations. They are China, Hong Kong, Brazil and the British Virgin Islands.
B. New sectors of Chinas economy are opening up for overseas investors and companies.
Deere & Company (NYSE:DE), the worlds largest agricultural machinery manufacturer,
is investing in China, as the country strives to update and improve the agricultural sector to
feed its growing population. Deeres latest site, a 1.6 billion yuan ($250 million) investment
covering 400,000 square meters, is in Harbin, the capital of Heilongjiang province, and
encompasses R&D facilities and an assembly plant.
6. Diversify domestic sources of capital: introduce competition
in banking and develop bond markets
A. At present banking fnance is relatively short in supply and very expensive.
B. Indian frms take risks by borrowing abroad. They would be happy to borrow in India if
more options existed, particularly by raising bond fnance.
A. Public sector banks will resist competition.
B. Foreign banks may only set up limited operations, focus on large frms and not reach out to
small and medium enterprises.
C. Reform of the bond market has been on the agenda but doesnt have any constituency
actively lobbying for it.
How to get it done:
A. Issue new banking licenses immediately. Do not restrict number to a handful. Allow at least
10-15 new banks.
B. Pass the Banking Reforms Bill which will rationalise voting rights for shareholders among
other measures; actively support M&A among PSU banks to allow them to gain global
scale; allow some of the less than optimal PSU banks to be privatized.
C. Direct SEBI to submit recommendations, in 30 days, to increase depth of bond market.
Case Study:
A. At around $4tn, Chinas domestic bond market is the worlds fourth largest after the US,
Japan and France, and much larger than the Shanghai equity markets $2.4tn. According to
HSBC, Chinas bond market is growing about 30 per cent a year.
7. Decentralise Approvals: Allow a single window at the
state level
A. Multi-layered approvals processes are a major deterrent to investment.
B. Centre should make policy but leave mechanics of approval to states.
C. Logically, approvals should be nearest to the geography of actual investment.

A. It will be resisted by existing institutions at the Centre like FIPB.
B. If one state government denies approval for a frivolous reason, it could potentially impact
investment (particularly FDI) in other states also.
How to get it done:
A. Single-window clearance for investment in each state capital.
Case Studies:
A. The Rajasthan government in 2011 launched the much-awaited single window system for
easy fow of investments into the state.
B. The Punjab Government, for the frst time ever, came out with a fxed deadline to roll out
single window clearance system for approvals to industrialists from various departments
in October 2013.
C. Goa in 2012 invited leading companies to set up shop in the state by offering them single
window clearance and ensuring transparency in government dealings.
D. Single Window model has been a success in Finland, Mauritius, Malaysia, Senegal, United
States, and Singapore due to cooperation and commitment of all stakeholders- private
and public. User-friendly system, which do not create complications for usual business
procedures are also prevalent in China, Malaysia, Sweden, Senegal, and the United States.
8. Digitise processes related to registration and clearances; make
time-bound clearances the norm rather than the exception
A. It will bring transparency, increase speed and reduce human discretion.
A. It will be resisted by the bureaucracy and vested interests.
How to get it done:
A. Do aggressive benchmarking on each process, and ensure that the full status of each
approvals journey through the bureaucratic process is disclosed/updated on a website,
with supporting reasons for a delay (wherever applicable)
B. B. The government needs to draft a digitised fow chart for online clearances.
Case Studies:
A. Colombia allows online pre-enrollment, making registration faster and simpler.
B. Netherlands has merged many approvals and implemented online application and clearance
systems for businesses.
C. UAE has innovated by creating a one window-one step application online system for getting
electricity and water.
D. Costa Rica has a risk-based approach on sanitary approvals for start-ups and online approval
system for construction.
9. Revisit Public Private Partnerships: End the crony capitalism
A. India needs $ 1 trillion in investment in infrastructure between 2012 and 2017. Public
sector alone doesnt have the resources.
B. Current PPP model is discredited because of accusations of crony capitalism and privatisation
of profts and nationalisation of loss.
A. It will disturb vested interests who have a stake in continuing the existing system.
How to get it done:
A. Ideally those projects which have a commercial potential are best built, owned and operated
by private investors who then offer goods for a price or services for a fee ratifed by an
independent regulator. How they fund this, how much they produce and who they sell/offer
to at what price cannot be a subject for ministerial micro-management.
B. Projects where commercial returns are not alluring should be best left to government to
fully own and operate. At best, they can outsource competencies from the private sector for
effcient construction. Even the operations can be outsourced through a bidding process.
C. Saga of annuity, concessions and revisions must end; projects which turn out to be unviable
because of wrong tendering or bidding should be put up for a second auction in an open
and transparent manner, so that these stuck projects dont become critical bottlenecks;
instead, their infrmities/unviability is openly recognised/disclosed, and the projects are re-
auctioned under modifed terms so as to remove the known infrmities and improve their
viability.
Case Studies:
A. PPPs in the UK have been highly successful with countries around the world trying to
emulate the UK model. The 101 million pound funded A55Llandegai to Holyhead trunk
road has been designed, fnanced and built by UK Highways A55, a consortium of Carillion
Laing and Hyder and is the frst trunk road built in Wales under the Private Finance Initiative.
B. Australias Sydney harbor Tunnel built on the PPP model with ownership of private sector
led to signifcant alleviation of congestion in the area and proved to be successful.
10. Reform labour laws
A. Rigid labour laws are the single biggest deterrent to investment in manufacturing.
B. India needs a robust manufacturing base to generate employment for surplus labour in
agriculture.
A. It will be resisted by organized labour.
How to get it done:
A. Have a grand-fathering clause which protects all incumbents from new labour laws, but
will apply to those joining the work force.
B. Devolve the fnal say on labour laws to state governments; unifed resistance will get
diffused.
A. Mobilise opinion among unorganized labour who comprise 90 percent of the workforce,
compared to just 10 percent in the organized sector.
Case Study:
A. China and Korea have made the transition to labour market security by reducing restrictions
on retrenchment while introducing unemployment insurance and active measures. Korea
eliminated the guarantee of lifetime employment in the late 1990s but provided strong
active and passive policies to compensate.
MANUFACTURING
1. Declare Manufacturing priority number one for Government:
Set up a Manufacturing Board chaired by PM
A. Policies related to manufacturing are set by several Union Ministries; turf wars can be
damaging.
B. All ministers should be on the same page when it comes to encouraging manufacturing, as
should Chief Ministers.
C. Manufacturing Board can also be a point of interface between PM and Chief Ministers.
A. Ministers and Chief Ministers will resent encroachment on their turf.
How to get it done:
A. Prime Minister must issue a Cabinet note outlining priority for manufacturing and circulate
it to his council as soon as he takes offce.
B. The Manufacturing Board should be convened every week by the Principal Secretary to
the PM. For big projects, it should bring together the relevant Cabinet Ministers and the
appropriate Chief Minister. It is a great way to enhance Centre-State communication and
cooperation.
C. To encourage states to participate, relevant Chief Minister can be co-chair (with PM) of the
Board on any investment that concerns his or her state.
Case Studies:
A. Between 1991 and 1996, the Foreign Investment Promotion Board (FIPB) fast-tracked
investment into a hitherto closed economy. The FIPB was chaired actively by then Principal
Secretary to Prime Minister A.N. Varma.
B. In Germany, and Japan, business associations, government ministries, and stakeholders
(especially labour unions) work together in institutionalized processes of consultation.
2. Set a target time limit for clearances: Should not exceed 125%
of time taken in Singapore and China
A. India ranks consistently poor on all global rankings of ease of doing business.
B. An explicit benchmarking against best practices in Indias competitor nations will send out
a clear signal to manufacturers on intent of the Government.
A. There will be resistance from the bureaucracy which draws its powers from the multiplicity
of clearances.
B. There will be resistant from ministers who will seek to protect their decision-making turf.
How to get it done:
A. Issue an executive order from the PMO setting the time limit.
B. Set up a committee under Cabinet Secretary to rationalize clearance process; force ministries
to decide speedily.
C. Ultimately, it would be appropriate for Centre to withdraw from clearances; there should be
a single window at the state level.
Case Studies:
A. According to Doing Business 2012 data, registering a business in India requires 12
procedures, which takes 29 days. This is in line with other BRIC countries: registering a
business in China requires 14 procedures and 38 days; in Russia it takes 9 procedures and
30 days; and in Brazil it takes 6 procedures and 34 days. India was ranked 132 out of 183
countries on ease of doing business in 2012 data.
B. In Singapore, the application processing time is about 15 minutes from the time of successful
online submission of all documents and information. The sole-proprietorship or partnership
is usually registered within 15 minutes. However, it may take between 14 days to 2 months
if the application needs to be referred to other authorities for approval or review.
C. In Gujarat, for starting a business, a time limit of three days is reportedly being achieved.
3. End all tax concessions and other regulations that incentivize
companies to remain SMEs
A. Almost 85% in India's manufacturing sector is located in enterprises with less than 50
workers, i.e., the Small to Medium Enterprises. These businesses and start-ups are the
backbone of any developing economy as their energy; vision and innovation create jobs in
the market.
B. Infusing growth will lead to consolidation of MSMEs which in turn will encourage small
businesses to take on businesses from the larger players.
C. Small businesses will become more competitive and competent. Large companies can
outsource some of their work to them, which in turn will help them increase revenue.
A. There will be a political outcry of withdrawal of concessions to small businesses.
B. Some small businesses satisfed with their state of being may resist.
How to get it done:
A. Instead of offering tax concessions which incentivize SMEs to remain small, offer access
to cheap fnance which will enable them to grow.
B. Reform of labour laws and their application to mid-size and large frms will also incentivize
scaling up by small frms.
C. Ensure Competition Law is not a hindrance to scaling up of manufacturing units.
Case Studies:
A. The UK governments report, Growing your Business: A report on Growing Micro
Businesses, highlights the increasing importance that growing micro businesses have
on the success of the economy. Making up 95% of all businesses, it identifes steps the
Government can take to help them develop their confdence and capability to grow, helping
the UK to get ahead in the global race.
B. In Japan, virtually 99% of all businesses are small or medium-sized enterprises (SMEs).
They employ a majority of the working population and hugely contribute to the economic
output. Though these companies are not as recognized as Japans giants, they form the
backbone of the service sector and are critical to the manufacturing and export supply
chain.
4. On labour laws, get rid of the Delhi infuence and change the
Seventh Schedule
A. India needs to get labour out of unproductive agriculture and into industry.
B. Other countries have already begun to age, including China. Though 10 years of the
demographic dividend have been lost, there is a lot that can still be salvaged.
C. There are alternative defnitions and alternative sources of data on gross enrolment ratios.
Therefore, without giving specifc numbers, the point is that gross enrolment ratios in
primary schools have sharply increased across the Indian states. There are still problems
with retention and high drop-out rates and quality of learning. However, there is greater
demand for education (not necessarily the same as skills), even among the poor. This
augurs well for increasing Indias labour productivity. After all, labour is something India
has in abundance and per capita GDP is a surrogate indicator of the per capita productivity
of the working age population.
D. There is plenty of entrepreneurship and entrepreneurial interest, precisely because India is
young.
A. It will be resisted by vested interests, particularly incumbent organized labour force.
B. There is nothing automatic about a demographic dividend resulting in increments to GDP
growth, at least by the same magnitude. That requires education/skills, health, physical
infrastructure, access to law and order and an enabling framework for growth. India doesnt
score well in any of these.
C. The labour market is stifed by controls. Ten years of the demographic dividend have already
been lost. The young population has been born, or has grown up, in a post-liberalization
era. If there is no growth, and there are no jobs, discontent becomes violent. The offcial
unemployment rate of around 8% is misleading.
How to get it done:
A. India is not a homogeneous country. The bulk of new entrants into the labour force are in
states like Rajasthan, Uttar Pradesh, Bihar, West Bengal, Madhya Pradesh and Maharashtra.
There are states that are already facing labour shortages, especially in southern India. The
labour surplus is in northern and eastern India. Different states are at different levels of
development. Hence, unless it has something to do with safety or welfare, nothing to do
with labour should be devised in Delhi. That is a disastrous template. Leave it to the states
to decide.
B. Specifcally, why should population control and family planning (Entry 20A), relief of
the disabled and the uemployable (Entry 9), trade unions, industrial and labour disputes
(Entry 22), social security and social insurance (Entry 23), welfare of labour (Entry 24) and
education (Entry 25) be in the Concurrent List? They should all be moved to the State List.
C. There should be no union schemes in the labour area. Where there are already existing
schemes, like MGNREGS, RTE, NRHM, NUHM, SSA and MDMS, states should be free
to amend the templates in any way they deem ft.
Case Studies:
A. In Bangladesh, regulations allow frms to retrench workers after giving one months notice.
This has been instrumental in making Bangladesh a hub for garment manufacturing as
frms are more agile to changes in global demand.
B. In Germany and Japan, strength of representation organizations such as employee unions,
employer associations, civil society organizations and the processes of consultation amongst
them explain the enduring competitive strengths their manufacturing eco-systems.
5. Reform employment exchanges: outsource to private sector
A. There is a big problem of matching labour supply to labour demand, something that
employment exchanges were supposed to do.
B. Barring limited instances of job offers at factory gates, there are only two channels of fnding
formal sector jobs: informal (family, caste, community) networks and labour contractors.
This kind of information dissemination cannot be effcient, apart from commissions,
exploitative or otherwise, paid to agents.
C. There can be no question of skill formation if recruitment is through such informal channels.
A. Most existing employment exchanges are moribund.
How to get it done:
A. Some states have experimented with reforming employment exchanges. States like Gujarat
and Rajasthan have allowed private placement agencies to get into the matching function.
Even a state like West Bengal has permitted private training organizations to offer training
at employment exchanges. The job or rojgarmelas in Rajasthan have been far more
successful in offering placements than employment exchanges.
B. There can be skills defcits that are structural in nature. These require candidates to go
through longer-duration training. In other instances, shorter-duration interventions will
work. And in the last category, all that is required is last-mile un-employability. The shorter-
duration and last-mile work more effciently if there are clearing houses that match supply
and demand. Therefore, privatize employment exchanges.
Case Study:
A. Australia in the mid-1990s contracted out most of its public service-provided employment
assistance to private and non-governmental agencies on a competitive tender basis (the
Job Network). The public employment service was thus abolished. This placed Australia
amongst world leaders in the outsourcing of such services.
6. Amend Land Acquisition Act: Eliminate need for multiple
clearances; keep price principle intact
A. Easy acquisition of land has become the most formidable obstacle to setting up manufacturing
facilities.
B. The new Land Acquisition Bill has created a new licence raj with clearances required at
multiple levels.
A. The new law was recently enacted; it will be diffcult to amend quickly.
How to get it done:
A. Keep the price-provisions i.e. the requirement to pay 4 times the market rate intact. Amend
only the clearances provisions which will lead to delays.
B. Impose stiff penalties if anyone is found violating the price principle.
Case Study:
A. A. In 2013, Pune-based Bharat Forge Ltd led by Baba Kalyani proposed to convert its
Chakan special economic zone (SEZ) into an integrated industrial area and become the frst
company to take advantage of the Maharashtra governments new industrial policy, which
allows developers to exit projects to build Chinese-style industrial enclaves. Earlier in
2009, the company and the state governments industrial infrastructure arm, Maharashtra
Industrial Development Corporation (MIDC), had formed a joint venture to set up the SEZ
and acquired 1,700ha of land.
7. The cost of power and energy for industry should be no more
than for any other sector: end cross subsidy of rest of economy
by industry
A. India charges higher tariffs for power supplied to industrial units than for regular consumers
and agriculture. This can be equalized.
B. Low costs are the key for competitive manufacturing. Indias poor (and sometimes
expensive) infrastructure ends up penalising manufacturers.
A. It may necessitate a rise in tariffs for regular consumers and agriculture; will be resisted.
B. It will be said that subsidy is being given for private proft.
How to get it done:
A. Declare manufacturing a national priority, necessary to generate jobs.
B. End free power to agriculture which benefts only the largest farmers; that will give room
for tariff cuts to industry.
Case Study:
A. In China, provincial governments provide free land, low cost power (50% lower than in
India) & integrated infrastructure to major Chinese players to ensure low cost production
and supply chain effciencies.
8. End protection, and preferential treatment to
manufacturing PSUs
A. Ineffcient PSUs drive down the competitiveness of the sectors in which they operate.
B. PSUs have little commitment to quality control, so crucial for globally competitive
manufacturing.
A. There will be vested interests in PSUs who will resist.
How to get it done:
A. Grant full managerial autonomy to manufacturing PSUs; ask them to compete with private
sector on a level-playing feld.
B. Hire managers from the private sector to run PSUs.
Case Study:
A. HAL is a classic example of a protected PSU which is ineffcient. Defence manufacturing
(aircraft in particular) should be opened to the private sector.
9.Support frms that are innovators; strengthen IPR regime,
give tax breaks for R&D
A. Presence of strong manufacturing states such as Gujarat, Maharashtra, Karnataka, which
are adopting innovation driven strategy.
B. Proposed creation of National Manufacturing Investment Zones (NIMZs) has received
special attention as it seeks to integrate the industrial infrastructure under one roof and
achieve economy of scale in manufacturing sector to help it grow rapidly.
A. As per the Global Innovation Index, India is ranked 56
th
with a score of 3.10. Iceland and
Sweden head the pack with scores of 4.86 and 4.85 respectively.
B. Indias share of global manufacturing GDP has not increased over the past few years. Also
Indian manufacturing has low share in countrys GDP; quite lower than its peers.
C. Innovation leads to automation leading to a cut in jobs. This would add to the already high
proportion of unemployed and underemployed work force.
How to get it done:
A. Induce investment in R&D via the route of Tax Holidays, incentives such as Technology
IPRs, Quality Certifcations etc.
B. Source technical know-how from manufacturing frms abroad to facilitate extensive
utilization of IT for supply chain management.
Case Studies:
A. A In Japan and Korea, private frms, government science and technology agencies and
technology institutes come together to produce large scale product and process innovations.
B. B. Japan, Korea, Taiwan, China and Thailand have built up large and competitive
manufacturing sectors by processes of building capabilities and adopting strategies that
induce such growth.
10. Fast track the commissioning of National Investment and
Manufacturing Zones (NIMZs) and MSME Clusters
A. The concentration of largely homogenous enterprises within a relatively limited
geographical area facilitates the intervention because of their similarity of needs and support
requirements, speeds up the dissemination of best practices because of the pervasiveness
of demonstration effects, and allows for a distribution of the fxed costs of interventions
among a large number of benefciaries. This is true for under-achieving clusters as well as
for the best performing ones.
B. Bundling via integration of industrial infrastructure would help achieve economy of scale
in the sector.
A. Clusters are more often than not characterized by extremely fragmented knowledge, latent
conficts, and an absence of a discussion forum.
B. SMEs in developing countries do not usually have on-going relationships and are
not accustomed to presenting articulated calls for actions to the local policy makers.
How to get it done:
A. Increase focus on developing special clusters for MSMEs for effcient resource utilization
and collaboration.
B. Establish partnerships with private sector where specialized know-how is needed.
Case Studies:
A. The Karnataka government has initiated the development of National Investment and
Manufacturing Zone at Tumkur near Bangalore. The Central government approved the
setting up of NIMZ for which the state government has already 9,000 acres.
B. Delhi-Gurgaon-FaridabadA cluster led by global OEMs (original equipment manufacturer)
like Suzuki & Hondas entry led to growth of components.
C. The government has already identifed key clusters under Delhi-Mumbai Industrial Corridor
(DMIC) project as an NMIZ.
TAXATION
1. For individuals, income tax bands and rates should be reset;
with (a) no tax on incomes below Rs 3 lakh per annum for
income earners under the age of 65 and Rs 5 lakh per annum for
pensioners, (b) 15% on the next Rs 3 lakh (c) 20% on the next
Rs 6 lakh and (d) 25% on income above Rs 12 lakh
A. It will be a popular move and provide relief to honest taxpayers.
B. It will promote compliance as tax rates fall across the board; likely to boost revenue.
A. Reducing the top tax rate from 30 percent to 25 percent may be seen as a pro-rich move.
How to get it done:
A. Make the announcement in the frst Budget in July 2014. Change from current rates of (a)
no tax on income up to Rs 2 lakh (b) 10% on Rs 2-5 lakh (c) 20% on Rs 5-10 lakh and (d)
30 % on incomes above Rs 10 lakh.
B. Announce an end to all deductions and exemptions.
C. Announce a commitment to retain the rates for fve years, except for infation-based changes
in threshold.
Case Studies:
A. Singapore has a progressive tax structure. After deducting personal relief, personal income
tax rates are between 0-20 percent.
B. Majority of households in the United States that don't pay federal income taxes are either
elderly or paying payroll taxes. Approximately, 22 percent of non-payers are retirees.
C. In Switzerland, while higher marginal rates can start at lower income levels, the top effective
federal rate of 11.5 percent starts at approximately 751,400 CHF for single tax payers. This
though doesnt include cantonal, communal or church taxes which can differ signifcantly.
2. Set a Corporate Proft Tax rate of 15% on profts of up to Rs
50 crore per annum and 25% on all sums above that amount.
End all exemptions, except for exports.
A. It will end the complexity in corporate tax which is mired with high rates and too many
exemptions.
B. Lower rates will encourage greater compliance.
C. It will boost government revenue; at the moment too many frms pay MAT (Minimum
Alternate Tax) at a rate (18.5 %) lower than the 25 percent being suggested.
D. Abolish MAT
A. It will be opposed by vested interests in the corporate sector who beneft from the existing
system.
B. Some populist politicians will argue reducing the top rate for corporate tax, is a pro-business
move.
How to get it done:
A. Make the announcement in the frst Budget in July 2014.
B. Announce a commitment to retain rates for fve years.
C. Mobilise public opinion by pointing out the perverse reality of present structure where
corporates effectively pay low rates.
Case Studies:
A. Bahamas doesnt levy any corporate income tax; nevertheless companies are subject to
other forms of taxation. Multinationals pay an effective tax rate of between 5% and 15%
depending on market cap.
B. Malaysia taxes corporate tax at 25%. In the European Union, the lowest corporate tax
rates were to be found in Bulgaria (10 %) Ireland (12.5%) Latvia and Lithuania (15%) and
Romania (16 %).
3. To reinforce the need for all companies to derive a much
greater amount of export income than they do now, a tax rebate
of 5% should be provided on profts derived from export income
in addition to rebates on indirect taxes.
A. It will incentivize Indian frms to compete in global markets and improve their
competitiveness.
B. That will have spillover effects for the local market which will get better quality goods and
services at lower prices.
C. It will help bridge the current account defcit and pave the way for a surplus.
A. It is an exemption, which is usually unadvisable for a solid tax system.
B. It can be misused by frms through accounting tricks.
How to get it done:
A. A. Announce it in the frst Budget with other tax reforms.
B. B. Rebate should be kept in place for at least 20 years (and not be subject to change by
successive governments) so as to bring about a long overdue structural change from chronic
defcit to a signifcant (3% of GDP) structural surplus in the current account by 2025 and
maintain either balance or a small surplus in the current account thereafter.
Case Studies:
A. Exported goods are GST-free if they are exported from Australia either before, or within,
60 days of the frst of the following two events: a) the supplier receives any payment for the
goods; b) the supplier issues an invoice for the goods.
B. According to the World Bank estimates, Indonesias taxes on exports (% of tax revenue)
was measured at 3.30 in 2011.
4. Amend Tax law to prevent future FMs from levying any
surcharges/special levies on income or profts taxes for special
purposes or to meet exigencies in revenue shortfalls. If exigent
revenue needs have to be met that should be achieved by
adjustments of rates on indirect taxes (like Road taxes, Luxury
goods taxes, GST when its implemented).
A. Surcharges and special levies are out of line with sound principles of taxation.
B. It will force the government to budget its expenses more carefully.
C. Indirect taxes are not progressive, so the government will be forced to think hard before
increasing the rates to meet revenue shortfalls.
A. There will be criticism that governments fscal freedom is being curbed by law.
B. There will be a resistance to provision to raise indirect tax rates to meet shortfalls as indirect
taxes are not progressive.
How to get it done:
A. Amend the tax law in the frst Budget.
B. Tie this measure with a new FRBM which will force fscal responsibility in any case.
Reduce revenue defcit and fscal defcit by 0.5 percent of GDP every year.
Case Studies:
A. Alaska in the United States doesn't have a state sales tax and depends chiefy on petroleum
revenue to pay for its state operations.
B. There is no income tax or social security levied on earnings by the Qatar government.
5. Introduce GST with no exemptions; set a low rate
of 12 percent (Centre plus states)
A. It will rationalize the complex and cascading nature of the indirect taxes system.
B. It will force greater compliance.
C. Government as a whole will gain more revenue.
D. It is estimated that it could boost the GDP growth rate by at least one percentage point per
annum.
A. It will be opposed by some state governments because of perceived loss in revenues.
B. It is viewed by some as stamping out fscal autonomy of states.
How to get it done:
A. Announce a grand bargain with state governments; assure not just full central compensation
for any losses but an addition to current revenues.
B. Crucial for government not to succumb to temptation of a higher rate (say 16 percent) as
that will encourage evasion and lower revenue collections.
Case Studies:
A. New Zealand's broad-based GST has often been suggested as a desirable model for a value
added tax.
B. France was among the frst countries to enact a common goods and services tax. Over 140
6. Tax agricultural income at the same rates/slabs as income tax
A. There is no rationale to give rich farmers tax exemption.
B. It will prevent people from avoiding taxes by falsely declaring their income as agricultural
income.
A. Populist politician will term it an anti-farmer measure.
How to get it done:
A. Bring agricultural income into the tax net in the First Budget in July 2014.
B. Stress the point that a majority of farmers and agricultural labourers will still remain outside
the direct tax net because their incomes are too low.
Case Study:
A. In Uruguay, the December 2006 tax reform (Law 18,083), implemented in July 2007,
replaced three taxes levied on corporate income with a unifed corporate income tax
(impuesto a la renta de la actividadempresarial--IRAE), levied at 25%. The IRAE replaced
the industrial and commercial activity tax (IRIC), the agricultural activity tax (IRA),
levied at 30%, and the tax on commissions (IC).
7. Pledge that there will never be any retrospective
change in tax laws
A. Nothing leads to more uncertainty for investors than retrospective amendments in law.
B. Indias reputation is badly damaged by the Vodafone tax amendment. It needs to be rectifed.
A. Some may argue that it is a governments sovereign right to enact retrospective amendments
in law.
B. Populist politicians may want to use it as an instrument to target some companies.
How to get it done:
A. Prime Minister and Finance Minister must issue the pledge.
B. If possible, enact it as a law.
Case Study:
A. The government should address the Vodafone, Shell and Nokia disputes on a fast track
basis, within 3 months of taking offce.
8. Reform tax administration: Allow tax scrutiny only with the
permission of Revenue Secretary; Use modern technology to
reduce interface between tax offcial and citizen
A. There is a need to reduce the harassment power of tax offcials.
B. Introduction of effcient information and online payment system will help to improve the
tax compliance.
C. Well organized information systems can be used to professionally mine the data to identify
high risk tax avoiders.
A. Tax bureaucracy will argue that it will encourage tax evasion and hamper their functioning.
How to get it done:
A. All phone tapping by any police and intelligence agencies needs to be sanctioned by the
Home Secretary. Tax scrutiny should be put on the same track. Revenue Secretary should
be the one point authority.
B. E-Governance systems can easily be introduced to allow online payments.
Case Studies:
A. Implementation of an e-government policy in Mexico has positioned the country among
the top performers of online services in the world.
B. Norways initiative to become a leader in the use of ICT in government has been sustained
by a high level of internet penetration and burgeoning information society.
9. Reduce arrears and settle disputes through fast track courts
or through out-of-court settlement.
A. In respect of only income taxes, the tax arrears in India amount to almost Rs. 5 lakh crore.
Reducing these arrears can help to boost revenue.
B. An overwhelming proportion of the arrears are on account of disputes and a large proportion
is stuck in courts awaiting judgments.
C. A large portion of revenue stuck in the apex courts after the tribunal gave the verdict and in
a signifcant number of cases, government is the appellant.
A. It is diffcult to recover almost 97% of the arrears in income tax for various reasons. The
amount stuck due to reasons like litigation, companies in liquidation, sick companies and
untraceable taxpayers, amounts to Rs. 4.82 lakh crore.
How to get it done:
A. Set up designated fast-track courts for tax cases.
B. Use arbitration and out-of-court settlements as a rule rather than exception.
Case Study:
A. The government in 2013 decided to set up six new benches of the Customs, Excise and
Service Tax Appellate Tribunal (CESTAT) to expedite disposal of indirect tax cases.
10. Devolve some powers of taxation to local city Governments
A. Many challenges of implementation in governance reside at the local level, particularly in
cities.
B. If cities were allowed to raise their own fnances, there would be greater accountability in
use.
A. Centre is loath to give up any powers of taxation: it is the source of its power over states
and local governments.
How to get it done:
A. Allow 50 percent of stamp duties and road taxes raised in a city to be retained by the local
government.
B. Allow some proportion of professional service taxes raised in a city to be retained by the
local government
C. Tie it in with the grand bargain on GST. Offer greater autonomy in taxation to local
bodies within state.
Case Study:
A. In a few transitional countries, including China and Vietnam, local governments have
traditionally had a larger role in administering national tax bases.
TWIN DEFICITS
1. Announce a cap on subsidies at 0.75 percent of GDP; Lay out
a roadmap to achieve it in three years
A. It is the only sustainable way to reduce the fscal defcit.
B. The middle class and rich do not need subsidies on food and fuel.
C. It will force a better targeting of the subsidies that remain.
A. It will be opposed by populist politicians across the spectrum.
B. It will be opposed by special interest groups, like fertilizer subsidies.
How to get it done:
A. Make the announcement in the frst budget in July 2014. That is when the political capital
of the government is highest.
B. Amend Food Security Bill to target only those below the poverty line.
C. Deregulate the price of diesel immediately. Increase prices by Rs 1-2 per month, instead of
50 paise.
D. In a 24 month period, introduce direct cash transfers on a war footing, using the Aadhar
platform, to those below the poverty line who require food and fuel subsidies.
Case Studies:
A. In New Zealand, despite initial protests, farm subsidies were repealed in 1984. Almost 30
different production subsidies and export incentives have been ended.
B. In September 2009, G20 leaders committed to rationalize and phase out over the medium
term ineffcient fossil fuel subsidies that encourage wasteful consumption at their summit
in Pittsburgh, United States. This move was closely mirrored by Asia-Pacifc Economic
Cooperation (APEC) leaders in November 2009.
C. In June 2014, Indonesia increased petrol prices by 44% to cut its annual subsidy bill of
$20 billion. Malaysia too followed suit and slashed petrol subsidies in the hope of flling a
budget hole which had reached 4.5% of GDP.
2. Reduce the number of Centrally-Sponsored Schemes from
147 to 20. Each central ministry like HRD, Health, Urban
Development, Rural Development should be permitted just
one programme; For instance, Rural Development should be
allowed a consolidated NREGA only
A. There are 147 centrally-sponsored schemes (on education, health, roads, urbanization etc)
many of which overlap. These can easily be reduced by 2-3rds to less than 50 immediately.
B. It will save a lot of resources in a sustainable way.
A. Centrally-sponsored schemes are perceived to deliver political capital to the ruling party/
coalition at the centre.
B. It is a way for the centre to control the spending patterns of the states.
How to get it done:
A. Implement the recommendations of the Chaturvedi Committee report on rationalizing
centrally-sponsored schemes.
B. Solicit the support of state governments for this, by offering them more freedom to spend
central resources (including on NREGA), in ways they deem appropriate.
C. Over fve years, reduce central schemes to less than 20.
Case Studies:
A. In agriculture, there are a total of 13 schemes. Similarly, in Animal Husbandry & Dairying
there are 15 schemes. It is possible to merge many of them into a comprehensive scheme
for development of sub-sectors.
B. Federations like Australia and Canada make provisions in their constitutions for equalizing
levels of service by providing for transfer of resources from central government to state
governments. In India, the Finance Commission transfers the funds. Though articles 275
280 of the constitution make similar provisions, these are meant to transfer resources to
the states to meet their requirements of expenditure. There is no specifc mention in our
constitution.
3. Ask the Seventh Pay Commission to downsize signifcantly
the lower bureaucracy at Class III and Class IV levels before
recommending a raise in wages for the rest
A. The Pay Commission is a once-in-a-decade opportunity to bargain with the bureaucracy on
fundamental reform and downsizing.
B. That it will begin its work just 3 months before the next government is sworn in to offce is
an opportunity to infuence its fnal output.
C. The fscal cannot afford to pay a bloated bureaucracy higher wages.
A. Previous Pay Commissions have failed to make an impact on productivity improvements
and simply ended up raising wages.
B. Bureaucracy will protect its turf.
How to get it done:
A. Strike a grand bargain with the upper bureaucracy; offer them higher salaries on the
condition that they massively downsize the lower bureaucracy at Class III and Class IV
levels which is bloated and low in productivity. Offer a generous VRS.
B. Do not implement the recommendations on higher wages without full implementation of
suggestions on productivity reform.
Case Studies:
A. Professional recruitment and performance-based promotion systems have been introduced
in many countries like Brazil, Philippines, Thailand and Malaysia (not to mention Canada,
Australia and UK).
B. Singapores civil servants are regarded one of most the effcient compared to those in other
countries in Asia. Corruption is rare and cronyism is not a widespread problem. When it
comes to capturing the potential of online government, Singapore is also ahead of the
game.
4. Widen direct taxes base: Lower rates, end exemptions and tax
agricultural income
A. Only a small minority of Indias population pays income tax.
B. Most corporates avail of exemptions to pay a lower rate.
C. Rich farmers should not be exempt from tax: only income level and not profession should
determine tax burden.
A. Special interests which derailed the Direct Taxes Code and had similar aims, will try and
stall direct tax reform.
B. Taxing agricultural income can be a political hot potato.
How to get it done:
A. Go back to the drawing board on the Direct Taxes Code.
B. End all corporate tax exemptions. Set a fat, low rate of between 20-25 percent.
C. Bring agriculture into the tax net. Make the case that a majority of farmers and agricultural
labourers will still be out of the tax net because their incomes will be lower than the
threshold.
Case Studies:
A. Picketty and Quian ("Income Inequality and Progressive Income Taxation in China and
India." CEPR Discussion Paper No. 5703. London, UK: Centre for Economic and Policy
Research, 2006. ) estimate that rising inequality in China could generate more revenue
from the current progressive income tax code equal to 4.0% in 2010, as compared to 1.0%
in 2000, and 0.1% in 1990.
B. Low Taxes and stable money are best exemplifed by Hong Kong and Singapore. Both
have modest tax rates. Prudent macroeconomic policy within a stable political and legal
environment has been the key to Singapores continuing success in maintaining one of the
worlds highest levels of economic freedom.
C. In Uruguay, the December 2006 tax reform (Law 18,083), implemented in July 2007,
replaced three taxes levied on corporate income with a unifed corporate income tax
(impuesto a la renta de la actividadempresarial--IRAE), levied at 25%. The IRAE replaced
the industrial and commercial activity tax (IRIC), the agricultural activity tax (IRA),
levied at 30%, and the tax on commissions (IC).
5. Reform Indirect Taxes: Introduce Goods and Services Tax at
the rate of 12 percent
A. Current indirect tax structure is cascading, complex and encourages evasion.
B. A single, lower rate of indirect tax will encourage compliance.
A. Resistance from state governments who fear revenue loss.
How to get it done:
A. Offer the states a grand bargain. Guarantee no revenue loss. In fact, offer an additional
revenue gain.
B. Important to keep the rate low (at 12 percent) rather than succumb to the temptation of
setting it higher (say at 16 percent). Revenues may not go up at a higher rate.
Case Studies:
A. New Zealand's broad-based GST has often been suggested as a desirable model for a value
added tax.
B. France was among the frst countries to enact a common goods and services tax. Over 140
6. Launch an aggressive privatization (not simply disinvestment)
programme
A. Government should not be running loss making enterprises like Air India.
B. A full-fedged privatization programme can help earn signifcant revenues which can be
used to retire debt interest payments on debt are a major part of the fscal defcit.
A. Populist politicians and labour unions will strongly oppose.
B. It will be argued that market conditions are not suitable to get an optimal price for PSUs.
How to get it done:
A. Win over labour unions with generous VRS schemes.
B. The new government should use its goodwill period when markets are doing well to
kick-start the process.
Case Studies:
A. Well known examples of privatization includes the sale of frms like British Telecom,
British Gas, Japan Air Lines, Chilean state owned airline, Mexican telephone company.
B. In the Nordic countries, sales of telecom company stakes dominated the privatisation
activities of 2000. The USD 7 billion initial public offering of shares in Telia, the Swedish
telecommunication company, was the largest ever in the Nordic region.
C. Germany's privatisation activity included sales such as a third offering of Deutsche Telekom
(DT) shares and the foatation of Deutsche Post, as well as the trade sale of Deutsche Bahn
Housing.
D. Brazil, in 2000, made public offerings of 16% of the shares in Petrobras (oil) dominated
Brazilian equity offerings and raised USD 4 billion. This was the largest-ever equity
offering in the country.
E. China's Unicorn (telecoms) went through an IPO of a 20% stake, which raised nearly USD
5 billion, and was seen as a major boost to China's privatisation programme.
7. End intervention in currency markets; Let rupee fnd
its own level
A. Currency market offers an automatic adjustment to a large current account defcit.
B. India does not have suffcient reserves to battle the might of global currency markets;
therefore a defence can go horribly wrong.
A. Sharp movements in the rupee (volatility) can be of legitimate concern.
B. Public outcry over sudden decline in rupees value forces intervention.
How to get it done:
A. Announce a free foat of the rupee.
B. Announce that the government will not intervene in currency markets through the RBI.
C. Make the case that intervention in currency markets has a limited impact in any case; if
anything, markets easily break down the defence of central bank intervention quickly.
Case Studies:
A. Chile, Colombia, Mexico and Peru are some of the countries which have operated with
free-foating currency exchange rates.
B. Major industrialized countries such as the Canada and the UK, smaller OECD countries such
as Australia and New Zealand, and middle income countries such as Peru and Mexico, have
all practiced foating with varying degrees of dirt. Even the US, usually regarded as the
cleanest of the foaters, has intervened occasionally in the foreign exchange market.
8. Remove all barriers to foreign infows, both FDI and FII
A. India is likely to have a current account defcit in the near term, which needs to be fnanced.
B. While it is vulnerable, India is not in a position to pick and choose which infows it would
prefer, either by sector or FDI vs. FII.
A. Protectionist interests will insist on retaining caps on FDI in various sectors.
B. Arguments will be made on the need to closely regulate FII to stem the fow of money from
dodgy sources and even tax havens.
How to get it done:
A. Remove all FDI caps except in select strategic sectors like defence where it can be capped
at 74 percent.
B. Defer General Anti-Avoidance Rules (GAAR), which empowers the (usually ineffcient
and prone-to-harassment) tax bureaucracy to examine FII in detail, until the fundamentals
which result in a big current account defcit are corrected.
Case Studies:
A. Four of the top fve recipients of foreign funds have been listed as developing economies
by the United Nations. They are China, Hong Kong, Brazil and the British Virgin Islands.
B. New sectors of Chinas economy are opening up for overseas investors and companies.
Deere & Company (NYSE:DE), the worlds largest agricultural machinery manufacturer,
is investing in China.
9. Diversify trade: look for Free Trade Areas with
non-traditional and traditional partners
A. Boosting exports signifcantly is a sustainable way to move from a current account defcit
to current account surplus.
B. Indias traditional markets for exports, the advanced economies, are likely to remain in
slowdown in the near future. Alternate markets need to be exploited.
C. In traditional markets, non-tariff barriers prevent exports of certain goods, particularly
agricultural commodities.
A. Negotiations over free trade areas are complex and long drawn.
B. There is a risk that imports may rise faster than exports because of structural rigidities in
the Indian system.
How to get it done:
A. Explore bilateral and multilateral FTAs with other emerging economies which are the
fastest growing markets in the world.
B. Conclude the FTA with the European Union. It is the largest single market in the world,
which is almost entirely closed to Indian agriculture (preferences go to African economies
and other Least Developed countries). A clause on greater labour mobility would boost
Indian services industries.
C. Fast track an investment and trade agreement with the US (which includes greater labour
mobility) which would help sectors as diverse as agriculture and IT to penetrate the US
market more effciently.
Case Studies:
A. NAFTA has been a remarkable success story for all three partners. It has contributed to
signifcant increases in trade and investment fows between Canada, the United States, and
Mexico. It has benefted companies in all three countries, paving the way for increased
sales, new partnerships, and new opportunities.
B. One of the most important RTAs in Asia and the Pacifc is the Association of South-East
Asian Nations (ASEAN) Free Trade Area, also referred to as AFTA, which aimed at
eliminating tariff barriers among member countries through the Agreement on the Common
Effective Preferential Tariff (CEPT) scheme.
10. Address non-tariff barriers (in sectors like pharmaceuticals,
media, agricultural commodities) which cause huge trade
defcit with China
A. Anywhere between 30 percent and 50 percent of Indias current account defcit is because
of its huge imbalance of trade with China.
B. While it makes little sense to restrict imports from China, India needs to forcefully bargain
for a reduction in non-tariff barriers for sectors like media, pharmaceuticals and agriculture
(meat, fruits and vegetables) where India has a comparative advantage.
A. India must avoid a trade war, or a tit-for-tat policy with China.
B. In some sectors like agriculture, structural problems may prevent India from taking
advantage of a lowering of non-tariff barriers.
How to get it done:
A. Make it a top priority in the bilateral agenda with China.
Case Studies:
A. EU-Korea FTA is one such example of the EU's strategy for reducing non-tariff barriers
for trade liberalization.
B. Prime Minister Manmohan Singh spelled out the government's commitment to remove all
tariff and non-tariff barriers on Bangladeshi exports in 2011.
1. Launch an improved National Urban Renewal Mission
scheme. The objective should be to double or nearly double
investment in urban infrastructure from 0.7 percent of GDP
currently to 1.1-1.4 percent of GDP in fve to seven years
A. Improved infrastructure will make our cities more productive and wealth-creating.
B. Cities economise on space and are a magnet for talent and youth. A young country needs
many more cities to draw its youth for education and employment.
C. Industrial and services clusters and satellite cities will provide new engines for growth.
Urbanisation is the only way to take GDP growth to the 8-10 percent range quickly.
A. Fast urbanisation brings with it greater possibilities of crime, pollution and stressful
lifestyles. It will call for more effective policing and other soft interventions.
B. Cities tend to be where rural politicians and business interests seek to generate electoral
funds by use of discretionary controls (on land, etc) and regulations. This group will try to
thwart radical change in city governance structures.
How to get it done:
A. The Committee on Urban Infrastructure calls for the creation of a unifed Ministry of Urban
Affairs and Housing with its counterpart in states.
B. If funds are directly provided by the centre to the top 50 cities, states will not stand in the
way.
C. Centre must use political allies in cities to canvas for changes in city governance structures
in order to receive funding.
Case Studies:
A. Delhi and Ahmedabad are two urban centres that have beneftted from massive investments
in infrastructure
2. Increase foor space index (FSI) in cities; at a minimum
double existing limits
A. One of the big myths about urban areas is there is too little land and it is pricey. This is true,
to some extent, but more urban land can be made available by increasing FSI (Floor Scale
Index). A doubling of FSI doubles land availability, reducing the effective cost of land.
B. Allowing higher FSIs allows a city to tax buyers more to raise funds for the infrastructure
necessary for allowing high-rises.
A. Politicians and builders have built a covert regulatory lock on making further land available
for development. This is to protect their profts on existing land and benami property parcels.
They will resist big increases in land availability tooth and nail.
B. Increase in land availability will bring down property values which even banks who have
lent money to property will resist.
How to get it done:
A. The best way to ensure reforms in urban regulations is to tie all central funding to these
reforms. Funds under JNNURM can be linked directly to how FSI and urban development
laws are changed to ensure cheaper land for housing and transport.
B. Another option is to create satellite cities with good public transport connections with
transport facilities preceding development.
Case Study:
A. FSIs in Singapore, New York and Hong Kong are in the range of 5-15 against just 1.33-2
in Mumbai.
3. Permit charter cities which run to separate rules without state
government interference
A. Charter cities are cities with their own rules of governance, independent of the state laws.
They can exist only if state governments allow them.
B. Modern cities need corporate-style governance structures with a CEO at the top. At the
very least, the top offcial or mayor will have to be directly elected and accountable to the
residents in some way.
C. India needs charter cities because such cities tend to attract lots of talent and industry by
giving them lots of freedom and encouragement to trade and create wealth.
D. A start can be made in the new cities to be built along the Delhi-Mumbai Industrial Corridor,
even though states will have to take leadership on this score.
A. Our cities are ruled from state capitals because of their wealth-creating potential. In
Mumbai, for example, more power rests with the unelected Municipal Commissioner than
the elected mayor. Politicians will resist giving cities freedom to create their own rules and
taxes because this will eat into their own sources of illegal wealth.
How to get it done:
A. Progressive states can make a start with charter cities by appointing CEOs to run them and
also by making changes in municipal laws.
B. In union territories, which are run directly by the Centre, efforts can be made to create
charter cities. Delhi would be a great experiment. So would Pondicherry or Silvassa.
Case Study:
A. The city-state of Singapore is a great example of how a charter-city can create wealth and
growth for its people. But the idea can be reasonably well replicated in a large country.
4. Allow city agencies to raise their own fnances
A. Financial autonomy is crucial for a city government to implement programmes effectively.
B. It will force accountability on city authorities who will no longer be able to pass the buck
on to state governments.

A. With rapid urbanisation and cities being the main centre of economic activity, a higher
allocation of resources to cities (even though correct and long overdue) could result in
challenges in funding initiatives in non-urban areas, in the short to medium term.
B. It could lead to lop-sided economic development across the country leading to even higher
migration from rural to urban area. Despite this hurdle, it will help to correct the current
imbalance by diverting unproductive manpower away from and reduce dependency on
agriculture.
How to get it done:
A. The professional tax collected in the city should be earmarked for the city government.
B. 50% of the stamp duties collected on property transactions in city limits should be given
to the city.
C. 50% of the road tax collected in the city limits should be given to the city.
Case Study:
A. The new City of Toronto Act which came into force on January l, 2007- introduced new
powers to provide tools and options to the new Toronto government to help achieve "made-
for-Toronto" policies that support achieving prosperity, opportunity and liveability for all.
The new Act was also part of the Ontario provincial government's overall municipal reform
efforts, which recognised cities as strong economic engines.
5. Enforce public disclosure of all city government decisions
A. To most citizens, it is not clear what the civic agencies are doing, or how well they are
doing it. It is important to set measures of success for each of the agencies, and to also have
public disclosure of their work, whether in small projects or at the level of achieving an
overall vision for the city.
A. It will be resisted by the bureaucracy and politicians.
How to get it done:
A. Public disclosure of expenditure on all projects.
B. Public information on all tenders for works executed in the city.
C. Regular progress reports on all projects.
D. Performance audits of projects undertaken by the city corporation, with scope for citizen
feedback.
E. CAG audit of the municipal body each year.
F. A public accounts committee to be created to provide continuous improvement in standards
for project execution.
Case Studies:
A. The Department for Communities and Local Government (DCLG) asks all local councils
and fre and rescue authorities in England to publish spending information over 500 online.
B. The city of Perth in Australia follows Public Interest Disclosures Act 2003 which recognises
importance of contributions of staff to enhance administrative and management practices
and strongly supports disclosures being made as to corrupt or other improper act.
6. Redevelop slums for low-cost housing
A. All urban areas, and especially metros, have large slum pockets to house migrants of every
kind. There is land available for vertical growth, but there is a problem about ownership
and tenancy. However, most slums are on government or public sector land, and hence
developing them is not going to create any legal tussles over ownership.
B. Since land is largely a state subject, states have to be involved in the planning. What the
centre can do is draw up a draft scheme and offer interest-free seed funding for creating
pilots projects one in every state. The states can then replicate these in other areas.
C. Instead of letting vested interests squabble over land ownership, the best way to make it
work is to retain the ownership of the land in government hands, and asking builders to
develop housing for the poor on the basis of construction costs.
D. The cost of the construction of houses given to slum-dwellers and squatters can be recovered
though reasonable rentals over 15 and 20 years.
E. To make the resultant property market vibrant, sale or lease of the house so provided can
be done through a fxed transfer fee payable to the government, or the corporation assigned
the job.
A. Slum housing has a transitional problem of convincing squatters to move temporarily
somewhere else while buildings can be constructed. This can be tackled by frst constructing
where land is available, and then offering people in existing slums ownership of built
houses. When they vacate, that land can be taken over for fresh construction.
B. There are many vested interests, including the underworld, involved in slum properties.
States will have to be prepared to handle law and order problems in the interim.
How to get it done:
A. The best way to get the slum development programme kickstarted is to get pilots
commissioned through a corporatised government entity run by competent bureaucrats.
B. Once a pilot is showcased, demand for more such schemes will come from below. The key
is to show and sell.
Case Studies:
A. Real estate developers in Surat have started the survey of as many as 80 slums of the 241
identifed to be re-developed as a part of Surat Municipal Corporation's (SMC) plan to
make Surat a "Zero Slum City.
B. Redevelopment and slum rehabilitation sanctioned by the Maharashtra government have
redefned the lives of an estimated 1.5 lakh families who have got or will get fats under the
scheme in the city.
C. The Karnataka government has decided to implement the Rajiv Awas Yojana (RAY) in 10
city corporation limits to facilitate affordable housing for slum-dwellers.
7. Central and state public sector undertakings are some of the
largest owners of land Divest this land via auctions
A. The Railways, for example, are said to own an estimated 4.3 lakh hectares of land, and at
least 10 percent of it is commercially exploitable immediately.
B. Public sector units created in the 1950s, 1960s and 1970s have large tracts of land in places
that are now becoming urban (SAIL, for example). Defunct public sector units, like the
fertiliser unit in Sindri, for example, have more than 6,000 acres of land that can be used
either for setting up another industrial unit without land acquisition or to create new urban
hubs.
A. Getting public sector units across various ministries to pool their resources, especially when
ministries are run by different coalition partners, can be tough. But the scheme does not
need 100 percent participation to succeed. Proof of concept can be established with even
one public sector company ceding its land and the others joining in later.
How to get it done:
A. The best way to go about it is to create a public sector land corporation which will pool all
the land available in various parts of the country, and offer shares to the units ceding the
land. As the land is developed and sold, it will create revenues in proportion to the land
ceded to the public sector corporation.
B. The land corporation can be listed, so that PSUs seeking to cash out can sell on the market
or hand it over to private equity players or other PSUs.
Case Studies:
A. The Alaska Constitution, State laws, and the Alaska Legislature all direct the Department
of Natural Resources (DNR) to sell state land for settlement and private ownership. DNR
makes land available through two types of programs. The frst is a sealed-bid auction
program for the sale of subdivision and other surveyed parcels. The second program is
the Remote Recreational Cabin Sites which is similar to the previous remote parcel and
homestead offerings.
B. The Government-owned National Textile Corporation (NTC) in 2010 had launched the
country's biggest-ever land e-auction of Poddar Mill, its 2.4 acre mill in Worli Naka in
Mumbai.
8. In peri-urban and peri-metropolitan areas, ELIMINATE
the need for prior approval to convert Agricultural land to
Residential land.
A. Cities have to expand both vertically and horizontally. Logically, they need to spread into
rural pockets on the outskirts.
B. It will eliminate corruption and rent seeking associated with approvals.
A. The Land Acquisition Act may need to be amended, which will run into political resistance.
B. Farmers need to be given adequate compensation otherwise there will be ferce resistance.
How to get it done:
A. Make the land-use change automatic on payment of a fat fee per acre.
Case Study:
A. The Maharashtra Land Revenue Code 1996, u/s 44A has simplifed the process, eliminating
the need for permission in case of use of agricultural land for bonafde industrial uses, subject
to certain conditions, which include the land being identifed for industrial purposes under
any plan, approved or under preparation, under the MRTP Act, 1966. The simplifcation
though does not extend to other uses like residential or commercial, even when the land has
been identifed for such purposes under approved plans prepared under MRTP Act, 1966.
9. Encourage affordable housing by eliminating stamp duty
for small apartments (less than 600 sq feet) and by automating
registration to eliminate transactions costs
A. Affordable housing is under-supplied.
B. Measure will have popular support.
A. Revenue authorities will resist exemption.
B. Opens up lobbying for other exemptions.
How to get it done:
A. Equalise circle rates with market rates of land. The revenue loss from this exemption will
be easily made up.
Case Study:
A. The Australian Capital Territory (ACT) is proposing to phase out stamp duty gradually over
the next 20 years, substituting the lost revenue with an increase in general rates, effectively
a land tax. The ACT model will address the potential shock of change, which is to phase
the stamp duty reductions and rate augments so progressively as to avoid any sudden jolt to
the property market.
10. Invest heavily in urban transport: every city with population
over 1 million should have a metro
A. Cities need to expand horizontally. Lack of connectivity is an obstacle.
B. It will prevent congestion caused by private vehicles.
C. It will have a positive effect on pollution mitigation and climate change policies.
A. It is logistically diffcult in over-crowded cities.
B. Existing public transport authorities do not have the required competence.
How to get it done:
A. All cities with a population above 1 million should have a metro system.
B. Construct elevated expressways to connect centre with peripheries.
C. Set up new metro construction companies and give out expressway contracts to private
companies.
Case Study:
A. The Delhi Metro Rail Corporation is worthy of emulation.

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